December 15th, 2021, 12:00 pm PT / Category: Interviews
How can banks better meet the evolving needs of their customers?
Deep Varma is the CTO of Varo. He has more than 20 years of Silicon Valley experience creating consumer-focused products, developing platform experiences that use artificial intelligence and big data, and building world-class engineering teams.
His experience includes companies like IBM, Yahoo!, Trulia/Zillow, and over 5 years of startup experience. He is leading Varo’s Technology teams to build Technology Bank from the ground-up to scale to millions of customers. He holds a Masters’ degree and an MBA from UC Berkeley.
Podcast
Transcript:
Tullio Siragusa:
Good afternoon, everyone. Welcome back to another episode of dojo.live. This is Tullio Siragusa broadcasting from Southern California. And today is Wednesday, December 15th, 2021. We’re halfway through the month and almost at the end of 2021. I’m joined by Kim Lantis in Hermosillo, Mexico and Carlos Ponce in Cuernavaca, Mexico. Hi guys, welcome back.
Carlos Ponce:
Good to be here, as ever.
Tullio Siragusa:
Today we’re talking with Deep Varma who is the Chief Technology Officer at Varo Bank. Welcome to the show, Deep. Good to have you with us.
Deep Varma:
Thank you. Thanks for having me.
Tullio Siragusa:
We’re talking about banking. We’re talking about people. We’re talking about improving services, quality of life, dare I say. But before we go into the topic of conversation today, let’s get to know our guest a little bit. Deep, if you could just be so kind to introduce yourself to the audience. Tell us a little bit about you and then we’ll talk about Varo in just a minute. Give us a little update about who you are and thanks again for being with us today.
Deep Varma:
Yeah, no worries. And thanks for having me. I think it’s very exciting. So I’m Deep Varma, you know, my official title is the Chief Technology Officer of Varo Bank, but, you know, guess what? I’m a human being like all of us and I’m a technologist. I’m a technologist. I’m an immigrant. I came to this country in 1991 for the higher education. I went to Berkeley, did my higher education, my Masters, my MBA. I worked for IBM, ABB, Yahoo, my own startups, Trulia, Zillow and now Varo. And I think when I look into myself, when I look into it, you know, I’m a technologist. And I think technology has reached the point where we can solve the problems, whether it is a business problem, whether it is a society problem, any kind of a problem. Technology is playing such an instrumental role in our day-to-day life.
Think about it nowadays. I have two boys and my wife is a school teacher. If internet goes down for five minutes, oh my God! There is a chaos. Like, oh my God, my life is gonna stop. Oh, my garage is not working because light is not there because I’m connected with these devices. I think I proudly claim myself to be a Silicon Valley boy, where I want to challenge the status quo. And I want to use this technology to build what I call this as, you know, equality and bring equality to the system and Varo plays a part of it. So this is who I am. And you know, and as we started this conversation, can you believe it? December 15th, 2021. We just ended this year, like, oh my God! Like this pandemic, like I just can’t believe it. This is 2020 and 2021 just erased.
Kim Lantis:
We’re coming up on year two. It’s insane.
Deep Varma:
Yeah, it’s insane. What I will ask my audience and everyone, look, this variant is dangerous. You know, take care of yourself. Holidays are coming in and just make sure that, you know, spend as much as time with your families. So I’m gonna leave my intro at this.
Tullio Siragusa:
Thank you. That was a great intro. It’s good to get to know you, Deep. We appreciate your passion for technology. Let’s talk about your company a little bit, Varo Bank. Tell us a little bit. What started this company? What was its mission and what do you guys do today?
Deep Varma:
Sure. So I think, let’s, let me take you to the point of why I joined Varo and that will tell you. So as I started in my intro, I’m an immigrant, right? As I said, I’m an immigrant. And every immigrant has a dream, which is called the American dream, right? That’s an American dream. We work very hard, right? We work very hard. We are hardworking fellows. So this is my story. So I’ve been in this country for 30 years. First 10 years, basically, when I came to this country for my education, I’m trying to – what I call myself as one of the personas of Varo – is the “battler.” First 10 years, I was battling. I still remember, in 1993 I applied for my first Honda Civic car. And my application got rejected by everyone, even though I’m working for IBM. But guess what? I don’t have a credit score.
They don’t want to give me the money. God bless Deep. Okay. I move to the second part of my journey, which is 2002, when I started, when I joined Var – sorry, Yahoo. And that is the time when I started building myself. My credibility is getting built. Then in 2013, I sold my second startup. So I did my first startup, which I sold. I did my second startup. And in 2013, an American dream came true where I don’t need to worry about money now. Okay? That’s an American dream. In 2013, I started thinking about what is next for me in my career, right? There are three things came to my mind; how technology is gonna make an impact. Number one, every human being wants a good health. 2) Everyone wants a place to live and 3) everyone wants money to survive. These are the three, these are the core pillars.
And I said, next chapter in my career is gonna be mostly in those pillars. So I joined a company called Trulio, sorry! Trulia! Your name is Tullio and Trulia… I’m getting confused.
Tullio Siragusa:
That could be a cool company, Trulio.
Deep Varma:
Cool company! Yeah, for sure. So I joined Trulia and Zillow where, you know, how do we people buy homes? How do they rent homes? Right? So this is an important five years. I worked there. And that is when in 2018, when I met Colin Walsh, the CEO of Varo Bank. When he told me what he’s trying to do, it resonated with me. That first 10 years when I needed the money, no one is giving me the money. Last 10 years when I don’t need money, everyone wants to give me money. Guess what? The system is broken here. Okay? The system is broken. We make sure that if you don’t have money, we don’t give you anything.
But if you have money, we give you everything. Okay? This resonated with me because I went through that journey and I felt I can join forces with Colin. And I can build this bank, which is driven by technology, which brings the equality, which makes this device <cellphone>, which all of us have next to me and I can use bank, right? So this is how my journey started with Varo. And I’m really a fanatic. I’m a customer fanatic. Every day I look into how I’m going to solve my customer problems. And this is what Varo does. Varo’s mission and purpose is how we are going to help millions of Americans. Those who are underserved, those who basically brings this technology and help people, those who are “battlers.” And how do we help them save their pay? Do we help them save their change? How do we save the fees factor, which we talked about? They don’t need to pay fees to access their own money. Then how do we help our customers build their credit score? So this is what Varo is doing. And Varo’s number one goal is to go and help millions of Americans. Those who have been underserved to build that bank and then bring this bank, which is for all of us.
Tullio Siragusa:
Great. What a great mission. Thanks for giving us the backdrop about that from another, uh, immigrant myself. I completely understand and resonate what you’re saying. So let’s go right into the topic today and see what we can unpack and learn. Kim, please. If your internet allows, introduce the topic.
Kim Lantis:
I know! Testing, testing.
Tullio Siragusa:
You’re good.
Kim Lantis:
How’s it going? All right. Cool. So thank you for being here today, Deep. We’re talking about using technology to build a bank for all which I think you laid out for us very nicely. Answering the question of how can banks better meet the evolving needs of their customers? So you laid out, I really liked this idea. You mentioned a Varo persona. I think you called it the “battler,” your first 10 years here in the United States. What are the Varo personas, if you have more? And how have you lined those up with those evolving needs? What are we seeing in your customers today?
Deep Varma:
Yeah. And I think personas are a good way to think about the customers, okay? But the reality here is it is less about the personas because personas are just virtual identity, right? What we talk about as a common vocabulary. But let’s go back to the basics, right? The basic is every person wants to make money. And what they want to do is they want to make sure that they have a place where they can securely keep their money. And then that money is accessible to them when they want that money. So I grew up in India. I still remember growing up there, how my mom used to save money and how she used to secure that money in the home, making sure that she has that money when it is accessible. I think consumers are demanding, at this moment of time, a fairness in the system. They’re demanding that, you know?
“Hey, I applied for this checking account. I applied for a savings account. Why are my applications not getting approved? Why I don’t have a debit card?” Right? So I think customer needs have evolved in the last 10 years. And I, let me take you back to the days, you know, when I used to print the maps if I had to go from destination A to destination B. I remember my first trip to San Diego. I did a printout of MapQuest and all those things, start the car, and then, you know, marking where I’m going. Then, bingo! Came those, you know, the navigation devices. Then I had to go and buy those Garmin devices and put it in my car. But guess what? There was a friction where I had to update my maps. If the satellite connections are less, my maps are not getting refreshed. And then there is something magical that happened. That everyone started getting these smartphones, right?
And then comes the maps technology that everything is embedded within your phone. So nowadays, when we start our journey from A to B we don’t think about anything. What we think about is start the car, “ding, ding, ding,” put it into my phone, destination A destination B and someone telling me take me to the point B. This is what technology is demanding. This is what the customers are demanding when it comes to the banking system. This is what they are saying, “Help me grow. Help me understand what are the right things to do for me.” And this is what we keep on. What we see in the marketplace is there are transitional relationships. What I mean by the transitional relationship? Customers log into their app and they see my balance, “Oh, this is my balance.” But branches are going away. We all know the physical branches are going away, right? How is the transformation of this transitional relationship to the emotional relationship going to happen? And this is what Varo is doing. That this is a bank which is with you 24/7. And I think we are driven in a very consumer driven economy, where the controls are more in the people’s hand rather than in the bank’s hands. And we are the one who listens to our customers and we grow with the needs what they have. I’m happy to give you more –
Kim Lantis:
It’s really taking the whole system and flipping it on its head. Cause I think –
Deep Varma:
You got it.
Kim Lantis:
Since as far back as you can go to the banking industry, however, many hundreds, maybe even thousands of years that is, the bank has had the control, right?
Deep Varma:
Yeah.
Tullio Siragusa:
Deep, it’s a, it’s… Go ahead, Carlos. Please.
Carlos Ponce:
Yes. Yeah. Thank you, Tullio. Okay. You mentioned that you’re building a bank for all. And I like the concept of building a bank for all and the images it conjures in my head. However, when you say all, if you would be so kind as to elaborate on the geographies that, or the effect that geographical boundaries could have on using Varo as an option. Let me give you an example. Let’s say that I am in Mexico or in Panama or some other country and I go to Varo and I want to open up an account for a specific purpose. Am I constrained by my geography? Or can I just go ahead and freely open a bank account? What is the situation for the people in general across the globe?
Deep Varma:
Yeah. I think we are still within the regulatory framework and the borders are still not free at this moment of time. But I’m looking for a day when there are global banks and it is irrelevant where you are. It is your money, whether you are in Mexico, India, US. But no, we are not there yet because Varo Bank has to be within the framework of US regulatory framework. So if you are applying for our bank, you know, there are certain obligations we have. But if you are in Mexico and you know, you have the social security number, you have all the details. Yeah. You can open the account from there. You don’t need to be physically present in the United States. So that way the borders has been, you know, broken. That there is no more Berlin Wall. That, you know, you don’t need to be in a country to open an account. But I think, Carlos, the point which you’re bringing, which is very exciting. Should we look for a day where there can be a bank and this is that bank can be used anywhere, right? And I can be a citizen of Mexico and I can still open my account with the seamless experience. But if your question is mostly around, can I open an account sitting from Mexico? I think if you fulfill all the regulatory needs, the answer is “yes,” you can.
Carlos Ponce:
And is it for like individual use or for business use? What are the restrictions?
Deep Varma:
Yeah, so Varo is only for the consumer. We are very consumer based. We are not business based. We are a consumer based.
Carlos Ponce:
I see. Thank you. Okay. Back to you, Tullio. Sorry.
Tullio Siragusa:
I think Kim has a follow up.
Kim Lantis:
I do! Testing. Are we good? <laugh> So talking about equality and equity, where equality would be treating everyone the same, like this is the application process, these are the boxes that you have to check. You know? It’s the same. Equity would be making adjustments so that everyone can kind of get to that same end goal, right? Having a bank account somewhere that I can do my transactions, etcetera. So what is it that Varo Money is doing specifically to create this equity across your customers and how does technology play a role in that?
Deep Varma:
Yeah. So Kim, if you remember, I started the conversation and shared an example of my, you know, basically the example that in 1993, how my car application for the Honda Civic got declined because, you know, I was not having those credit scores, right? So that was, and you know, an immigrant who has money, who’s working for IBM, but the system is putting me in a box and saying, “You need to have this much credit score to get that loan,” right? And I think equity plays. So the thing is, the entry door has to be the same for everyone. That’s the most important thing. Right? So that’s the equality which comes into the picture, that, “How do I treat everyone in the same way?” Right?
Kim Lantis:
So that’s the sex, gender…
Deep Varma:
Race, gender, anything, right? It doesn’t matter, right? I did, when I did the intro, I said, this statement: first and foremost, I’m a human being, right?
That’s the most important part, right? We all are human beings. When we go for our blood test, it doesn’t matter. But the blood test will say, you are B+, B-, you know, blah, blah, blah. Right? So I think equality is where you treat everyone safe, right? That’s the most part. Equity is how do you make sure that there is an obligation, that we have as a system, as a bank, that, how do you make sure that you grow people also at the same level? Right? And I think that is the part which is most important. Like I met – during this three years of a journey at Varo Bank, I will tell you – I’m a customer fanatic. I listen to customer stories. We have so many customers, those who don’t have access to the tools to save money, right? And if they go out and take advice from someone, guess what? They have to pay for it.
They don’t have money to pay for it. Right? So this information, which used to be in a black box, can we take that information and give accessibility to everyone? This is called the equity, where you are now taking this information and you are distributing that information to everyone, irrespective of you earning ten thousand a year or you are earning a hundred thousand dollars a year. The information is shared equally. And this brings that equity. Now I want to emphasize, as we were talking about the personas, right? So there are battlers, there are builders and all those things, right? What Varo also looks into when you come to our door, your application gets approved. You know, you need to fulfill certain obligatory elements of the regulatory system, which is KYC. But once you – that’s needed, these are the foundational pieces which we need to fulfill.
But once you come in, right? We don’t treat you differently. Or because you know, “You are using the bank more so you have to pay extra fees,” or, “You are doing this, you have to…” We don’t do any of those things. But then there is another part of the equality, uh, equity, which is, “How do I help you grow in that food chain?” Also, “What tools and information do I provide you to save more money? How do I make sure that you have the right information?” And, you know, these are the areas which I think both equality and equity needs to go into this hand-in-hand and you just cannot ignore one.
Kim Lantis:
Mm-hmm <affirmative>. Yeah. I mean, it’s breaking the cycle of it being expensive to be poor. Right? So,
Tullio Siragusa:
Yes. In fact, speaking…
Kim Lantis:
Does your tech play a role in identifying people’s needs? Go ahead. I’m sorry, Tullio.
Tullio Siragusa:
No, no, go ahead. Continue.
Kim Lantis:
That was my question of just how tech is playing a role in identifying these needs of your individual bankers.
Deep Varma:
Yeah. So your question is how do we identify the individual needs of the customers, right?
Tullio Siragusa:
If I could just add to that question.
Deep Varma:
Sure, sure.
Tullio Siragusa:
Earlier, when we, when you introduced yourself, we were talking about how the first 10 years of your life here in the country, you needed the money, but no one could give you the money. And then now you don’t need the money, everybody wants to give you the money. It’s this upside down thing that happens. Those who need it the most don’t get it and those who don’t need it, get all of it. What’s the bank doing to create a more equal playing field around that challenge? If I could build on the question that Kim was asking.
Deep Varma:
Yeah. So I think, let me start with what Kim was saying. How do we know what are the customer needs and how do we identify those needs? So, first and foremost, you know, we have many tools within our application where we are always hearing to our customer voices, right? What customers are looking for, right? And I call them as an explicit signals. These are the signals, which are coming from our customer bases, right? So they are telling us to our different channels, whether it is our internal channel or the social channel. So we keep a close tab into that. Then there are something is called the implicit channels, implicit channels, what we think your needs are. And then, so I will give you a very specific example here. This is a story. Last year I was at the gas station. I’m filling gas in my car.
There was one guy comes to me and says, “I need two gallon, uh, can you put gas, $20 gas in my car?” What was my first reaction? “Seriously?” Being a banker and being a banker who is building a bank for all of us, I engaged. And I said, “Tell me more about it.” This person is supposed to drive from location A to location B. He is a janitor who is a gig economy whose salary is gonna come two days later. He’s a janitor who needs to put the gas to go to that location, to do the work. Otherwise, this person won’t be able to get the money. It was such a touching story. I end up putting the gas, but now what Varo did – we give you $20 for free! Okay? You become a banker, a part of the Varo system, and we have launched a product called “Varo Advance.”
Varo Advance is, if you work with Varo, if there are times you need $20, for any reason, we will give you the $20 for free. We don’t charge you any fees. Guess what? This is how you build a system. You build a system to help the people, and guess what? When we help them, they pay us that money back. And give the example which I’m sharing, this person whom I paid this $20 in a gas station, took my address and sent me check back after one week for $21.22 – including the interest. So people, humans, really genuinely care. And what we need to do is we need to change that. And we need to help in the other way so that we can bring this equality to the system. So this is an example. And then, you know what we did? “Great! You want $50?”
“We will charge you a minimal fee because we don’t want to make profits out of you. You need $75? Sure! We will give you the $75,” right? So recently we have launched, I don’t know if you guys have seen, a Varo Believe card where we help you build your credit, right? You use our bank, you pay and we help you build your credit score. Isn’t that amazing? That you’re using and a bank is helping you? We have launched what we call a Varo Marketplace, where if you buy things in our marketplace, you save money, you get cash rewards back, right? So our customers, those who are in the gig economy, they need this. And this is how you build a system where you don’t think about profits. Like, don’t treat your customer as a profit, but you think about how you help them. And I’m just, before I share up, I will, because I’m fanatic about this space, right?
I will share an example. 1996, I went to one of the traditional banks to open my account. And guess what? When I entered that door, there were three lines. Three lines! There is a line going towards the right, which is a red carpet. If you are here for more than $250,000 investment, go there. If you are here to talk about your something else, you go straight. But if you don’t know what you want, you go straight. I was lost! I was lost.
Kim Lantis:
And you’re like, “Here, this is the shirt off my back? Would you like this too? <laugh>
Deep Varma:
Come on guys!
Tullio Siragusa:
You know what? I have to say, what I love about what you’re saying, it reminds me, you know, as a, as an immigrant too, growing up in a small town. It reminds me that in a small town, like everybody knows each other, right? The banker knew you, knew your business, did this kind of thing. Because it was all relationship based. And over the years, and regulation, and profits and in so many cases, greed – everything’s become transactional. So it’s, you’re no longer a human being with needs. You’re just a transaction, a fee.
Kim Lantis:
Mm-hmm <affirmative>.
Tullio Siragusa:
And it’s sad that that’s what it’s come down to. We just accept it as how that’s, how it is. Right? And you try to work within that system. But you guys are introducing the idea of relationship again. How are you using technology to scale that?
Kim Lantis:
Yeah! And faith in humanity! A restored faith in humanity!
Tullio Siragusa:
Right, right.
Kim Lantis:
Not just a relationship, but like, this person, this client, this customer isn’t really out to screw me. They’re not going to steal every penny that I’m gonna, you know, or vice versa the bank also. Right?
Tullio Siragusa:
Right. And for the most part, technology’s always used to automate the transaction or to make it more efficient, it’s always about driving better margin. There is this idea of building better relationship, but it’s not really based on any kind of empathy, for example, which is what you’re talking about. So how are you guys now creating, you’re creating this, but how do you scale it? How do you use technology to scale it?
Deep Varma:
Yeah.
Tullio Siragusa:
And do it in a way that also protects the bank and reduces the risks for the bank.
Deep Varma:
Yeah. Yeah. Definitely, I think that’s a great point. And I call it the transformation of transitional based relationship to the emotional based relationship. And this is what you were talking about. I totally connect with you, you know, growing up in India. When I, you know, my dad used to send me to a bank and the bankers they used to know that I’m the son of person, X, Y, Z, and all those things. And they used to treat me and say, you know, “Hey, how are you?” And then they ask, used to ask me, “Hey, do you want tea or coffee?” something like that. And you used to feel that you belong. This is the belongingness there. We need to bring that, you know, the belongingness, that emotional connection. Now, how do we bring that emotional connection? How do we bring, you know, this empathy and how do we scale?
Right? So it is easy to do it for 10, 20, but how do you scale to millions? I think, first and the foremost is, from our mission and purpose, from our design systems, from our teams, the kind of the people we hire and all those things, everything has to be very mission driven, right? Because if one of the pillars is broken, the system is going to break. So our investors, our employees, you know, everything what we do, we have to be really very mission driven. And I will tell you, Varo is very mission driven and we are customer fanatics. And we are customer first, one of the values that we have. So this is all good on a piece of a paper, but how this is transforming into the technology? Great example: log into our app. When you log into our app, this app is welcoming you. The design of the app is where, you know, it shows you, you know, “Hey, welcome Deep Varma!
Right? And it shows me, you know, because I love my family. So I have uploaded my photo of my family. It’s, you know, when I log in, I see the photo of my family, right? And then I think we, so that’s, that’s a first scale, right? So how do we connect? The next scale is I need to know you better to serve you better. Right? So that’s another part of the area, where, how do we continue to learn about you? Implicit and explicit signals – and serve you the content at the right time, what you need. So that’s how we are doing it.
Tullio Siragusa:
Great. Well, we could talk for a long time, but we’re out of time. And Deep, you know, we’re about to introduce a new segment on dojo.live. It’s actually a Design Thinking segment. And I’d love to invite you back because I think what the bank is doing ties very closely, at least to the philosophy that I subscribe to, which is empathy is the key to design thinking. It’s not a transactional thing. So, we definitely have to have you back for that. And we’ll talk about your company’s culture a little bit. We’re up on time. It’s been a pleasure to have you. We’re so happy that you guys are doing what you’re doing. It’s so needed. And hopefully others will, whether they consider it a competitive threat or not, they see it as an opportunity to shift the mindset from transactional to more relationship. Cause that’s ultimately what we all want.
Deep Varma:
Awesome.
Tullio Siragusa:
Stay with us as we go off the air in just a minute. We have one more show this week, tomorrow. What have we got coming up guys?
Carlos Ponce:
Well, Tullio, tomorrow we have garbage! But not exactly garbage per se. Of course not the interview, right? We’re talking about what we’re gonna be doing with garbage, to have a conversation around the topic of garbage. We’re gonna be speaking with Richard Galvez, the director of software and data science at CleanRobotics. The topic is gonna be “Reducing Landfill Globally by Diverting Recyclables and Compost Using AI and Robotics.” So please, please, guys, don’t miss it. We all need to watch this interview. We all need to know what we can do with everything we’re putting out there. There’s no place as “away” when you’re throwing something. So join us tomorrow, right here on dojo.live at 12:00 PM Pacific as ever. And remember, enjoy life, have fun and be safe everyone. Thank you.
