Verna Grayce Chao is Executive Vice President in charge of City National Bank’s Treasury Management Solutions and serves on the bank’s Executive Committee. Chao manages a department of more than 200 colleagues who are responsible for City National’s commercial deposit products. She also oversees the bank’s fintech subsidiaries, which include Exactuals, a Los Angeles-based provider of innovative SaaS solutions for complex payments in the entertainment industry, FilmTrack, a Studio City-based leader in intellectual property rights management, and Datafaction, the bank’s accounting solution.
Verna Grayce Chao joined FISPAN’s Clayton Weir on the If I Ran the Bank podcast to discuss CNB’s entertainment payment ecosystem, being client obsessed, and how she would run the bank like a technology company.
Operationally, Chao said that being agile means focusing on a specific vertical and being willing to have 18-month roadmaps. That being said, she also stated that there needs to be room for flexibility; “when we understand something’s a priority for a client, we need to be willing to groom that in sooner and not wait.”
Chao reiterated that if you’re going to be true to your values and focus on your clients, then you need to be responsive to their pain points. “It is a virtuous circle where once you build that trust and you deliver the solution to their pain, they’re more open with you,” said Chao, adding, “that’s the value to the bank, that by solving their problems, you build that trust.”
CNB’s Entertainment Payment Ecosystem
CNB started their entertainment payment ecosystem in 2010 when they acquired Datafaction, a specialized accounting software. Their entertainment payment ecosystem is what they call their collection of dedicated technology solutions along with the software companies and FinTechs that help facilitate those solutions, including Datafaction. “City National Bank sees itself as part of the entertainment community and focuses on servicing those needs,” Chao said.
CNB envisioned an integrated approach for treasury professionals or accountants who use both their bank account and ledger to manage their day-to-day finances with Datafaction. CNB then noticed that many of the payments coming through were coming from SAG-AFTRA and other entertainment guilds. Then, a new problem cropped up. CNB was seeing a high volume of very low-value checks (sometimes even under a dollar!), which drove the need to focus on how they could drive efficiency with these deposits. CNB then acquired Exactuals, which was able to help drive those efficiencies.
Further upstream in the entertainment industry, there is a heavy focus on film and television contracts and music rights. CNB was able to acquire FilmTrack, which has helped them build out a ledger for those contracts and rights, and assists with the flow of payments.
“Now, we’ve integrated them through our API platform, EASI Link®, which enables the payment flows, but more importantly, the data flows,” said Chao, adding “the payments were flowing no matter what, but what was really valuable was how the data gets passed.”
Chao explained that the users for FilmTrack, AgiLink, and Datafaction are all different and CNB has to design and build for their users, which is why it’s valuable to have distinct entities and measure against the satisfaction of those client sets.
An interesting part of the entertainment payment ecosystem is the adjacent markets for these companies. For example, Datafaction fits into the family office space. CNB was able to ask what their requirements are, how they differ, identify them, and add a new module. This new module isn’t necessarily relevant for the entertainment business firm, but using the same platform with this new module helps CNB enter the market for business management firms with a differentiated product. “When you have a differentiated technology, a servicing model, and a knowledge base that can serve that client, you have a very defensible market position,” Chao said.
In another example, Exactuals aggregates payments and can find similarities with the insurance broker market. With a few additions and modifications, CNB can enter that market. With FilmTrack, they manage intellectual property rights and there are many adjacent industries where digitizing the process has the same challenges.
Solving a problem in one industry can have an effect on adjacent industries where CNB can go to market.