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.
City National Bank
City National Bank (CNB) is based in Los Angeles and focuses on the major metropolitan areas as well as key entertainment areas like California, New York, Nashville, and Atlanta. They are also growing in new areas like Miami, FL and Washington, DC. CNB grew while serving the entertainment industry (music, film, and television production), as well as commercial real estate and development industries. The bank carries a heavy focus on these key vertical industries, in addition to personal banking where they service high net worth clients.
“I’d say the main thing that empowers us is our DNA, our values,” Chao said, adding “we like to say we’re client obsessed. Everyone at City National Bank, starting at the CEO, is hyper-focused on solving our client’s problems- it is a virtue at our bank.”
Running the Bank Like a Technology Company
When Chao was asked what she would do if she ran the bank, she said she would run it more like a technology company. “We don’t just think about the product, but really the servicing around it, as well as the client experience and what they are trying to accomplish,” Chao said. When she says she would run the bank like a technology company, she means to focus on those ultimate outcomes and the end-to-end process their bank clients are trying to achieve.
Chao said CNB is already “adopting the technology methodologies around being truly agile,” such as “being willing to adjust our backlogs based on our client’s feedback, being laser-focused on innovating alongside our clients, and ensuring we’re responsive to that as well.”
CNB likes to take an ecosystem approach, asking themselves:
- What are the parts that we do really well and need to own?
- How do we drive those parts for differentiation and innovation?
- Which parts of the ecosystem do we want to partner with?
- What does that mean for delivering capability to our clients?
- How does that servicing model work?
- How does this support us achieving our goals?
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.
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Listen to Verna Grayce on the full episode of the If I Ran the Bank podcast on Apple Podcasts, Spotify, Google Podcasts, Amazon Music or by visiting the If I Ran the Bank website.
