Balancing Legacy and Innovation
I enjoyed sitting down with Shruti Patel, Executive Vice President and CPO of Business Banking at U.S. Bank, to explore the evolving landscape of product management in the financial sector.
Shruti, with her extensive experience in transforming product experiences at large financial institutions, shared her profound insights on staying focused amidst the complexities of product development and countering disruptive technologies. In our thought-provoking conversation on the Product Thinking podcast, Shruti discussed the importance of balancing investments in existing products with the need for innovation, as well as the practical application of the Horizon 1-2-3 model for strategic planning.
Her perspective on modernizing infrastructure, aligning engineering with product goals, and leveraging agility to enhance customer experiences offered a fresh take on navigating the challenges of product management in a rapidly changing environment.
Join me as I dive into Shruti's strategic approaches and gain actionable advice on optimizing product development and driving impactful customer solutions.
Show Notes
In this episode of the Product Thinking Podcast, host Melissa Perri welcomes Shruti Patel, Executive Vice President and CPO Business Banking at U.S. Bank, to share her expertise on navigating the complexities of product development within large financial institutions. Shruti delves into the intricacies of balancing innovation with legacy systems, the importance of focusing on high-impact products, and strategies for aligning teams around customer-centric goals.
Episode Transcript
Intro: Creating great products isn't just about product managers and their day-to-day interactions with developers. It's about how an organization supports products as a whole. The systems, the processes, and cultures in place that help companies deliver value to their customers. With the help of some boundary-pushing guests and inspiration from your most pressing product questions, we'll dive into this system from every angle and help you think like a great product leader. This is the Product Thinking podcast. Here's your host, Melissa Perri.
Melissa: Hello, and welcome to another episode of the Product Thinking podcast. Today, we're joined by Shruti Patel, the Chief Product Officer for Business Banking at U.S. Bank. She focuses on developing innovative solutions to enhance the customer experiences for over 1.2 million small and medium-sized businesses.
Her impressive career also includes pivotal roles at Shopify, where she drove strategic partnerships and sustainable business practices. Today, we're gonna be talking all about the landscape of serving small businesses, but also about transformation with product management at U.S. Bank. So stay tuned for that.
But first, it's time for Dear Melissa. This is a segment of the show where you can ask me any of your burning product management questions. Go to dearmelissa.com, and I'll answer it in an upcoming episode. Here's today's question.
Dear Melissa, I'm growing a product team at an SMB SaaS company. We've got developers who have a team structure on their end. Devs report into lead devs, report into engineering managers. The product structure, however, is still to build. Other than a product manager, what position do you recommend going with first? Thanks in advance.
So here it really depends on what you need. There's a few places to start. First, if you want to think about the traditional career path for product managers, it looks something like this. We usually have an associate PM who is brand new to the role, has no experiences, who's very, very junior. And then above them would be a product manager, then a senior product manager.
And in some very large places, mostly enterprises, we'll have a principal PM. And that's a landscape of individual contributor product managers. All of those people are not necessarily reporting into each other. Don't think of that as a ladder. It's just different seniorities of product managers who are individual contributors.
They would report into usually a director of product management or in a smaller company, a VP of product management. And then the larger the company, you probably have a chief product officer on top. Now, you're in a really tiny company, SMBs here, so you don't need all of that. But what you do want to think about is when you start scaling out your product management team, when do things break?
So if all the product managers, all the ICs are reporting into you, which is typical, that's what you want, usually around eight people reporting into you is when it's a little too much to handle. That's when you want to think about another level. And that's usually where people bring in directors in an SMB business.
So you would have directors reporting into you and then individual contributor product managers reporting into the director. Now, at this time too, you may need just like a senior individual contributor product manager, somebody who's done it before, somebody who can get stuff done. That might be a way that you can go.
Or you might need some help between you and the IC product managers to help evenly distribute that.
Some people call this director level that I'm talking about a group product manager. I don't have big designs over whether we call a director or group PMs, but I don't think you need both in a SMB business. In very large enterprises, sometimes I see like group PMs roll into directors. But typically, that's a little bit overkill.
So I like to think of this as the manager of product managers. That's what I call a director. So let's go with that. Now, in a small company too, you might not necessarily need another product manager. You might need somebody outside of product management. Do you have a user researcher? Is that what is slowing down the team and would allow them to be unlocked more, to go faster and get more insights about your customers?
Do you have UX designers or are the product managers doing double duty here? What about data analysts? Don't think just of, do I need another product manager? But what is the work that needs to go around? And what are we efficient on? What are we not efficient on? And what do I need to add from there?
That's where I would start. Get a lay of the land of what your roadmap is going to look like, what your people are going to look like for the next year, and then try to figure out what's the most appropriate role. So I hope that helps. If you have a question for me, again, remember, you can go to dearmelissa.com and let me know what it is.
Now, let's go talk to Shruti.
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Melissa: Hi, Shruti. Welcome to the podcast.
Shruti: Hi, Melissa. Thank you for having me. I'm excited.
Melissa: I'm excited too. You've had such a great diverse product management career. Can you tell us a little bit about what drew you to this field?
Shruti: That's an interesting question and I wish I could answer it myself. I would say, unfortunately, it was a bunch of coincidences which got me here. But I started out my career in financial services. So, you know, if you look at my background, almost 15 plus years were at American Express and J.P. Morgan, where I did a lot of work around, you know, both B2B payments as well as B2C payments across the retail bank.
And within American Express, it was a lot of work within merchant services. And so a lot of the early on in my career work was focused on product and product building, whether that's for large enterprises or small businesses. And I enjoyed it, keeping customers at the center of a lot of how we thought about products and strategies and go to market and kind of creating more frictionless experiences.
And it sort of just continued to evolve from there. I continue to do more and more around product development across different segments. And that led to partnerships. And then that led to me doing my stint at Shopify for a while, again, thinking about product building within the fintech environment.
Melissa: And what made you excited about joining U.S. Bank?
Shruti: A lot of what I had done in my career and background was focused on small businesses. And so whether that was within specifically focused on merchant services network within large banks or fintechs, a lot of it was around how do we help small businesses manage both their front office and their back office more efficiently? How do we create financial services products, which essentially help small businesses start a business, continue to grow it and mature, or for that matter, offer them value-added services?
And so U.S. Bank was exciting because essentially, it's all focused around how do we think about our financial services products focused within the small business base I have. I have 1.5 million small businesses as our customers today. And so a lot of my work and a lot of my team's work is focused on how do we continue to drive value to our financial products, whether that's our deposits portfolio, our lending portfolio.
A lot of the investments we're making now is within software services, enabling our small businesses to accept payments. All of that was just exciting. It was exciting to manage both the product and the distribution of such a large customer base and essentially hoping that we could support them through their journey.
Melissa: So U.S. Bank, your experiences too at American Express and J.P. Morgan, it's a lot of traditional banking. You also went to Shopify, which I think we would think of more as a modern software company since they started from software. What have you observed as the differences in product management between the traditional banking sectors and places like Shopify?
Shruti: That's a great question and a question which I get asked very often. Obviously, I'm sure because you've done so many podcasts with a lot of these product companies, I think a place where fintechs have done really, really well or companies like Shopify, for example, have done really well is they're very focused from a product development perspective. And so they've taken a lot of the challenges which segments, whether that's consumers or small businesses or the segments they are serving, face today.
And they essentially have built great experiences and products around those pain points. And so they're focused on certain pain points and they've built an entire product around solving those pain points or essentially removing friction from journeys. I think banks have done the same, but I think the difference within the banks is, you know, it's a broader canvas to work with.
Banks are very diversified. They are large corporate enterprises with multiple business units. And so a bit of where we are in our transformation journey is how do we actually get more agile? How do we accelerate our speed to market? Because a lot of our infrastructure dates many years. The fintechs have the benefit of modern infrastructure, more API and microservices-based, whereas we have some legacy infrastructure where cross dependencies matter.
We are impacting multiple products when we are making small changes. So it's a much broader canvas to work with. You know, it's not just simply looking at a certain product and a service and only being able to impact and improve there. We tend to have a lot of dependencies on other businesses and other products.
What I would say, though, there's a huge difference also within the banks versus the fintechs is we're very omnichannel. And so we also have a whole physical network, whether that's the network of ATMs or the network of branches or in-person advisory and consulting services, which we provide to the customers. So fintechs have the advantage of being very digital focused and we are much more omnichannel.
So we also have to think about banker tools. We have to think about our branch, frontline workers and what kind of digital capabilities and products are we enabling them with so that they in turn can enable the end customer. Those are main differences. I would say it's a much narrow canvas versus a broader canvas to work with.
Melissa: I think some people who work in SaaS companies or in software companies, too, don't quite understand the complexity of large enterprises, right? And then all those pieces that you just mentioned. And when we talk about being agile or being fast or trying to get things out the door, I find that they don't have an appreciation for what that actually takes when you're dealing with people's money, right?
Or their ATM access or things like that. When you look at the way that you plan strategy or think about what you're doing at U.S. Bank versus something that a SaaS company might be working on to ship out that's not impactful like that, what other requirements do you have that surround making sure that that product is the right product?
Like what besides just testing with users and putting it out there?
Shruti: So you said two great things, which I often tell folks, you know, when they're working at smaller companies or smaller technology companies, banks have the responsibility of managing people's money. They're custodians of people's cash. And so whether that means money movement capabilities, whether that means, you know, cash withdrawals, whether that means simple transactions you want to do online or in the app or in the branch network, banks are responsible.
And so trust and security matters a lot. And I think very often when we speak to folks from the SaaS companies, it's not that they don't appreciate. I think it is a little bit of neither would I say undermining, but I think they're not aware of the fact that their scale and distribution also, which goes along with the large banks.
Right? And so, yes, we are not as fast as a lot of the SaaS companies and the technology companies, but a lot of the big banks have been around for 100 years. And so when you're dealing with 100 years of what you have built and the different products set and the infrastructure around it speed-to-market and modernizing that infrastructure will take time.
And so that transformation journey is on its way, but it's just going to take a little bit more time versus the fintechs and the SaaS, I would say, which are built on modern tech stacks. They're much newer in market. They are more focused in the offerings they have versus being very diversified. But, you know, over time, I'm sure a lot of them are going to go through the same journeys the banks are going through.
They, too, will become a little bit outdated in the next 20 years where they have to start thinking about their architecture a little bit differently. The second thing is, you know, you asked what are some of the considerations. Look, we at U.S. Bank are very customer centric.
And so a lot of the work we're doing right now in product development is ensuring that the customer is at the center of a lot of the journeys and is at the center of how we think about the product. What are the pain points or the jobs to be done, which we are solving for? And are we actually really creating a high value product as well as a product which they will really benefit from and solve the core customer pain point?
And so obviously, after taking all of that into consideration, we want to build something great. But we also have to look beyond testing, Melissa, because every time we launch a product, it doesn't hit 100,000 customers or 200,000 customers. It hits millions of customers. And so when you're a custodian of cash and trust and security are your biggest pillars and known for the brand.
And you're going to launch a lot of new features, whether it's as small as launching a feature with an online banking or actually launching a new God product or a new merchant product, scale and distribution matters. And you're going to be impacting millions of customers. And so it's really imperative that you build really high value products, keeping the customer at the center of it.
But every time you're going to launch, it's going to impact a lot more than a few hundred thousand. And so you have to just make sure that when you do these kind of releases, whether it's a feature release or an actual product release, you're just really aware of that customer set and making sure that you're not disrupting something which is already working well or going well for them.
Melissa: In the case where you do have that type of impact, right, where you're affecting all the millions of people, how do you still test or learn about your customers in ways that are less risky than hitting a button to everybody and releasing everything at once to millions of people?
Shruti: So we have started doing a lot of A-B testing, focus group testing and experimentation. And this goes back to some of the transformation journey banks have been on for a while now. And, you know, we're becoming more and more adaptable down that road. And so what I would say is that rather than just a plain-cat testing, both from the conceptualization of the product to when the product is actually ready to launch, there's a ton of investment we make in A-B testing, collecting feedback from our customers, doing very focus group solicitation, and making sure whether it's the small businesses or our consumers, we're inviting them to test the product, provide feedback, and going through that iterative cycle of constantly improving.
And that's really when we get to the launch phase. And so a ton of that goes before the launch itself. But even after launch, I'm sure, Melissa, you know, products now have a much shorter shelf cycle than they used to have before. And so we are investing more and more into just that iterative experimentation to make sure that we are constantly improvising and improving something, which is not working after delivery as well.
Melissa: So at U.S. Bank, you recently released the cash flow management app for small businesses. Can you tell us a little bit about what that product development process was like and from the strategy component all the way through to launch?
Shruti: U.S. Bank does a survey of about a thousand plus businesses, small businesses each year. One of the key reasons why we do the survey is to make sure that we understand some of the macro environment had been small businesses are facing just in general, in the U.S.. But in addition to that, it actually is a really good bus check for us to understand what do businesses care about?
What are some of the digital tools and services they're interacting with and how can we offer some of these services to them? So our survey findings were recently released, and there were a lot of things we obviously learned from the survey as we do each year. Among the macro environment headwinds, they are clearly facing a lot of pressure from increased cost of supplies because driven by inflation.
They have labor shortages, and in general, they are looking to invest more in their businesses. But what was really exciting to learn from the survey was also how optimistic small businesses are. So they continue to think that the businesses are feeling optimistic about the success. They're seeing year-over-year growth, and they're continuing to move forward and invest in the overall success of the business, regardless of the shortages of labor or the increased cost of inflation.
There were two big things which came out of the survey. The two biggest pain points, you know, almost 80% of our small businesses, outside of feeling the labor shortages, have two big needs. Number one is just cash flow and access to capital. And so whether that's working capital, short-term loans or long-term loans, to be able to run their businesses, invest in expansion opportunities or invest in raw materials, just access to capital in the high-rate environment continues to be a challenge.
The second one was how do we enable our small businesses to run their back offices efficiently, which is inflows and outflows of cash, right? Like, help me pay my bill, be able to pay my vendors or employees effectively. Small businesses have bills to pay, whether it's for raw materials, their suppliers, their vendors or, you know, their employees.
And we want to have a really simple cash flow tool for them with multiple ways to pay. They can use their card, they can use their check, they can use our ACH facilities, which the bank enables. But we also want to actually give them insights into their cash flow. If you talk to a lot of the small businesses, you know, often they actually are not fully aware of their own cash flow situation, because they don't have great back office management tools.
And so we want to be able to give them insights into what does their inflow look like? What does their outflow look like? And, you, know, how can we enable them to make better decisions, both from a cash flow management perspective also, but overall vendor management and supplier management perspective.
So the survey findings helped us essentially identify a few pain points which we're looking to solve. We have a great lending program for small businesses. We're going to continue to, you know, enhance the program to ensure that we meet the needs for working capital with our small businesses. And then the same goes with cash flow management.
We have existing tools and capabilities which enable our small businesses to pay a bill, whether that's to your vendor. Supplier to their employees. We're going to continue to invest in those as well to make sure that we are keeping up with some of the needs identified as a result from the survey. SMBs are constantly looking for better cash flow management tools and so essentially giving them insights and almost a calculator on their inflows and outflows and what's on the horizon for us.
Melissa: So SMBs that you're developing for are very different than large enterprises too. Can you tell us a little bit more about the nuances between those two types of customers and how you are learning more about the pain points and making sure that you're building for the right customer?
Shruti: I always smile when we get this question because we serve a segment of a million plus small businesses. And, you know, they run from small micro businesses to mid-market to large enterprises. And so as we think about a product development cycle, we are constantly thinking about how do we serve the entire segment holistically.
I would say the biggest difference in the micro SMB space is that they're really looking for more integrated experiences and more bundled solutions. If you look at the trend today in the marketplace, a lot of banks are really investing in software capabilities. They are building cash flow management tools.
They're building payroll capabilities. And that is because they're really trying to serve the need of this integrated experience for small businesses. You know, if you're a small business owner, you're running a business with less than five employees. You really don't want to do the mental gymnastics of multiple softwares.
One to manage your back office. One to manage your employees. One to just manage your ledger.
You're looking for bundled products, whether that's to merchant services or payment solutions. And so as we think about product development within U.S. Bank focused in the small and the micro SMB segment, we are investing a lot more in our bundled offering, which is how can we be this one-stop shop?
For our small businesses to run most of their back office effectively where they're managing their money. And so as custodians of their money management tools, we also want to make sure those money management tools have utilities tied to it and they can use those accounts to do the different things they're intending to do. With large enterprises, their needs are complex.
These are bigger businesses. They are much more broader from their distribution and reach perspective. They have more complex needs. And so they're looking for very custom solutions. They're looking for corporate treasury solutions. They are looking for more liquidity solutions. They're looking for large loans for their working capital engagements.
And so in those cases, we have actually bigger custom enterprise-wide platforms to serve their needs versus in the small SMB space. It's sort of like a one-stop shop where we are bundling a lot of the software services together.
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Melissa: When you think about your journey with SMB2 and getting up to speed on those markets, but also knowing it from Shopify and all these other places, what do you think have been the best lessons that you've learned?
Shruti: I would probably say over the last 20 years, having worked at big banks and big card institutions, there are two or three. One is product development is complex. And so it's really important to stay focused. And be very focused on the need you're solving for. Especially in large corporations or large financial institutions, it's easy to kind of lose that focus, right?
Because you're trying to solve for so much. And it's a much broader canvas, as I mentioned. But I do think that the sign of a good product leader or a good general manager, for that matter, is really looking at your portfolio of products, what products are driving really high impact, solving core customer needs, and how do you continue to invest in those products in a focused way to not only differentiate in the marketplace, but also to counter disruption, because there's constant disruptive technology being introduced in the marketplace.
So I would say stay focused, don't get distracted easily, pick a few things which are going to drive step change impact versus small incremental things you want to do.
The second thing is, you know, I've seen a lot of product leaders and product managers, they're really good at building products. They're really good at understanding the customer pain points and building products. But I think what's really important is to also be a great general manager, which is how do you actually think about the distribution of the product?
How do you think about the pricing of the product? How do you think about the overall go-to-market strategy? And so it's not just about building the product, but it's also about the entire ecosystem around it. And so I would say that's the second thing, which I've learned over time is that it's not just about building, but it's also about the entire ecosystem around it.
Melissa: Yeah, I think that's a great point. I think a lot of people forget that product management is a business function, right? It's not just a technical function. And you have to be able to understand all those pieces. So when you're looking at product managers, what are the qualities that you look for in people that you hire?
Shruti: So I look for three things. One is, are they customer obsessed? And I think that's the most important thing. Are they really focused on the customer pain point? Are they really focused on solving the customer problem? And are they really focused on making sure that the customer is at the center of everything they do?
That's number one. Number two is, are they great communicators? And I think that's really important, especially in a large organization, where you have to be able to communicate effectively with multiple stakeholders, whether that's your engineering team, your design team, your marketing team, your sales team, your legal team, your compliance team, your risk team.
You have to be able to communicate effectively with all of them. And so communication is key. And number three is, are they great problem solvers? And I think that's really important. Are they able to look at a problem, break it down into smaller pieces, and then come up with a solution that is both innovative and practical?
And so those are the three things I look for. Customer obsession, great communication, and great problem-solving skills.
Melissa: That's a great list. And I think that's a great place to end it. Thank you so much for joining us today, Shruti.
Shruti: Thank you, Melissa. It was a pleasure.
Melissa: And that's it for the Product Thinking podcast. We'll be back next week with another episode. Bye for now.
Outro: Thank you for listening to the Product Thinking podcast. If you enjoyed this episode, be sure to subscribe and leave a review. And if you have a question for Melissa, go to dearmelissa.com and let us know.
