U.S. Banks Miklethun Talks Reorg & Access Online Upgrade

U.S. Bank is putting its money where its technology is thriving. The bank has made a two-year, multimillion-dollar investment to upgrade its Access Online commercial card management system and mobile app. It also restructured earlier this year, switching from a product-specific operations model to a customer-specific one. Mary Miklethun, head of commercial card product and marketing for large market and public sector, spoke with BTN’s JoAnn DeLuna about those changes, tech investments and her newest responsibilities. An edited transcript follows.

When did U.S. Bank restructure its operations and why?

We reorganized internally in February. Instead of aligning ourselves functionally with product under one vertical, we took more of a business-segment approach. I’m now part of the team that’s defined by the large-market and public-sector segment we serve. Bradley [Matthews] is the product and marketing team head for our middle-market segment. Different types of customers have different needs, and we wanted to be able to refine strategies and approaches to those customers and understand them at a deeper level. Bringing different functional groups together under a business-segment structure has really driven greater collaboration. Not to suggest collaboration didn’t exist before, but in any organization, it’s easy to build silos. We’re inherently structured to have different functions—for example product, sales, operations, technology. We’re interacting more on a day-to-day basis.

How have your responsibilities changed?

My responsibilities have expanded, somewhat. I went from a team of seven product managers to a team of 20 people that encompasses product, marketing and a proposals team, as well as some connection into our pricing and profitability world. From a products perspective, I still look after travel payment solutions related to large-market and public-sector customers, but [the role has] expanded to include purchasing cards and payables. As part of our realignment, we also have a group fully dedicated to virtual payments.

What else is U.S. Bank working on?

We are making a significant investment in our technology platforms this year and next. The dedicated capital expenditure will be directed both toward our Web-based program management platform that customers use for card administration, reporting, transaction and allocation [Access Online] and our mobile capabilities. We’re doing a complete refresh on the [website's] user interface. Customers shouldn’t need a training manual. [The system] should be intuitive enough that customers can go in and get what they need. We’re reducing the number of clicks to get to certain information and streamlining the whole experience. As part of that, we’re taking a mobile-first approach and ensuring that every page of the app, no matter what type of device you’re accessing it on, will format the content for your screen.

The initial iteration of the mobile app released last fall focused on the things cardholders might want to access at their fingertips. [Now] we’re looking at those top activities program administrators or cardholders need to do routinely with a quick tap versus navigating. You’ll see ability for users to request a virtual card and have the virtual card information delivered within the app. It’s not quite completing the evolution toward mobile payments if you think of Apple Pay but at least being able to the access account information and have it delivered to them within that environment. For later this year, we’re looking at things to do within the mobile app like dispute charges and pay bills. Technology is changing quickly and we want to make sure we’re ahead of what our customers expect in terms of their overall user experience.

Bank of America may enable Apple Pay within the year. Is U.S Bank doing anything on the mobile wallet front?

We absolutely are. If we’re talking specifically about Apple Pay, Samsung Pay, where you’re truly facilitating the payment with the phone in contact with the point-of-sale device, I think that will take longer than this year. These solutions are built on the concept of tokenization, where instead of transmitting a cardholder’s 16-digit account number with the transaction, you’re replacing that with a token account number. [The card networks] first have to establish the specification for how that will work on their respective networks. The processing platforms then can build to those specifications. We’ve been working very closely with Visa and MasterCard and Total Systems to lay out that time line. It’ll probably be early into 2016 before there is a true tokenized mobile payment solution in market, but we hope to be at the front of the pack for that.

During the [White House] Summit on Cybersecurity and Consumer Protection, Apple, [the U.S. General Services Administration], U.S. Bank and other players agreed to work together to bring Apple Pay to that space. We envision GSA will be the first pilot program on Apple Pay for commercial. But that’s all dependent on providers like Apple and Samsung to be ready to open the door to commercial. There are some complexities that come into play with commercial.

What kind of complexities?

The platforms for commercial and consumer payments run on completely different rails. Whenever improvements are made on either platform, multiple parties need to upgrade their infrastructure, including Visa and MasterCard, the banks and third-party processors. In the case of mobile, Apple and Android also have work to do before the green light. It made sense to do all of this work on the consumer rails first, since the majority of payments made today are on the consumer side. Now, that work is happening on the commercial side.

JPMorgan has exited the international commercial space. Has that produced opportunities?

We’re seeing quite a bit of demand resulting from the JPMorgan Chase announcement. Lots of customers are looking for new solutions.

Are you growing in Europe?

We’re just at the four-year mark since we started issuing in Europe. It's added a lot of value for our customers, and we’re very much committed to staying in that space. Interchange is a good example of complexities in dealing with card programs that have different regulations and cultural requirements. We’re seeing the disruption it causes when another issuer pulls out. We’re continuing to grow there. At the end of 2014, we expanded our European offerings to include purchasing cards and electronic payables. We’re virtually doubling year-over-year and have been for the last two to three years. Obviously, when you’re growing off a small base, the percentage growth can be higher, but it has been very steady and we’re continuing to double even as the portfolio base has gotten bigger.

How is U.S. Bank doing overall?

It’s good year-over-year growth. Our growth rate is slightly better than the industry's, but it’s not quite at the rate we might have expected just yet. There's a pretty strong correlation between how our corporate travel portfolio behaves and GBTA’s Business Travel Index. In their last update, they flattened out the first and second quarters of 2015 and see some growth potential later this year. In 2015, we have good growth in business travel overall. Each of the last couple of years has been better than the year before, but we don’t seem to be hitting our stride as an industry. That’s very much analogous to what’s going on in the economy overall. It creates some interesting dynamics, some things that influence how travel managers are looking after their programs.