Hank Seale, Founder and Chairman of Q2, a secure, cloud-based digital banking solutions company headquartered in Austin, Texas, delivered an insightful CEO keynote at the 2019 AFT Spring Summit in Tucson, Arizona.
Seale described starting his career as a loan payments teller for The Bank of the Hills in Texas, and eventually working his way up to Vice President of Operations. Following the bank’s acquisition, Seale moved to the financial technology side of the industry when he co-founded an interactive voice response company Regency Voice Systems, which evolved into a multimillion-dollar business with more than 1,600 community bank customers. They offered the last five checks in the last 30 days in the beginning and added ATM locations, loan balances and bill pay.
“I started thinking all that information on the phone system is confusing. What if we put it on a screen?” Seale said. He built a system that not only had banking and accounting information but also weather the sports scores. “Anything you might be interested in all on one screen plus all your main information.”
When Regency was acquired in 1997, Seale started Q UP Systems, one of the early Internet banking systems and a provider of technology to more than 700 community financial institutions. Q UP built its success on really knowing their customers. They would keep a reference list of every financial institution — including contacts, assets and core providers.
Seale relayed how in 2000, Q UP became part of the S1 Corporation, where Seale served as the CEO of S1’s Community and Regional Solutions group until 2001. That led to another learning moment. “You don't merge. You either acquire or your acquired; you are either controlled or you control.” Shortly afterwards, the Internet bubble burst, leading Seale to venture out on his own again, and founding Q2.
Seale recalled how he outlined Q2’s 20-year vision which was geared towards helping community financial institution compete with the money-center banks, “I just don't want three banks telling us what financial services they're going to have.” His overarching goal was to enhance the strength of community financial institutions by mitigating their challenges, such as scale, liquidity, and regulatory impact. “If a banker asks for something, we'll bend over backwards to try and get it,” Seale told the AFT audience.
“Our goal is to remove friction from the process of buying stuff. Have a more informed process through better transparency on both sides, and in the middle, to give everybody the ability to have a more efficient process,” Seale maintained.
Since its creation in 2004, Q2 Software, Inc. evolved to Q2ebanking, and its parent company Q2 Holdings, which went public in 2014. Today, Q2 provides a secure channel for everything that touches the internet down to the financial institution and to about 13 million end users and roughly 2 million businesses. They are growing quite rapidly, Seale pointed out, with a $3 billion market cap.
Q2 also has about five or six years left on their original 20-year vision, but a change to the business model is coming. “Within the next five to seven years the business of banking will radically change, not to the detriment of anybody in this room, but the benefit of all, because there is a huge untapped market that we're all sitting in…$22 trillion worth of capacity not being utilized to its fullest extent.”