Gary Zimmerman Of MaxMyInterest On The Future of Money and Banking

An Interview With David Liu

Success in any career requires dedication, hard work, and great mentorship along the way. To be successful in finance, I think you also need to be intellectually curious and a creative problem solver.

The way we bank has changed dramatically over the last decade. It was not too long ago when you had to wait in line in a bank to deposit money. Today things are totally different. You can do your banking without ever walking into a bank. In addition, the whole concept of money has changed. In the recent past, money usually meant bills and coins. But today, the concept of money has expanded to include digital currency [and NFTs]. What other innovations should we expect to see in banking in the short and medium term?

To address this, we are talking to leaders in the banking, finance, and fintech worlds, to discuss the future of banking and money over the next few years. As a part of this series, I had the pleasure of interviewing Gary Zimmerman.

Gary Zimmerman is the CEO of MaxMyInterest, a cash management platform that helps Americans earn more on their cash. Prior to founding MaxMyInterest, Gary was an investment banker at Citigroup, where he was a Managing Director and Global Head of Strategic Solutions for Sovereign Wealth Funds. He graduated magna cum laude from Harvard University with a degree in Economics, and subsequently completed an executive education program at the Wharton School of The University of Pennsylvania.

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started in this industry?

I had an interest in banking ever since I was a little kid. In high school, my interests shifted more to math and science and when I applied to college I planned to major in biochemistry. In my freshman year, I took my first economics class and was instantly hooked. I had finally found a field of study whose frameworks aligned with how I think.

Can you share the most interesting story that happened to you since you began your career?

There are so many stories! I spent the first 15 years of my career as an investment banker, advising on the purchase and sale of companies across multiple industries all over the world. One of my favorite transactions was actually a relatively small deal where we advised on the sale of a packaging company that made the small plastic takeout sushi trays you find in the supermarket. The owner planned to sell the business to a single buyer, but I insisted on setting up a competitive process to find the highest price. The final negotiation involved three different bidders that we spread out across three different floors of a law firm in Los Angeles. I kept running from floor to floor, negotiating terms until we ultimately doubled the value of the company.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

I’m a big believer that nothing you do in life is ever wasted. The corollary to that is that you should always work your hardest and do your best at everything you do. It’s that consistency of effort (and a good measure of luck) that can lead to success in whatever you set your mind to. On numerous occasions I’ve found that seemingly disparate life experiences have later proven valuable later. You never know which experiences will ultimately prove to be helpful, but if you always try your hardest, you’ll get the most out of each opportunity.

Ok wonderful. Let’s now shift to the main focus of our interview. Can you tell our readers about the most interesting projects you are working on now?

During the Financial Crisis, I became fascinated by a multi-trillion-dollar market that had historically garnered little attention. There are more than $17 trillion of bank deposits in the United States alone, but most people pay very little attention to their cash, where it sits, and what it’s earning. I started to research the market and found that there was a better way to manage cash that could help people earn more while keeping their cash safe in FDIC-insured bank accounts. It wasn’t until later that I realized that this this had the potential to become a company. In 2013, I left my job working for one of the largest banks in the world and launched MaxMyInterest.com to help bring this vision to reality.

How do you think this might change the world?

It struck me that if we could figure out how to bring greater efficiency and transparency to this market, then we could make everyone better off. My initial calculations suggested that we could help American households earn tens of billions of dollars in incremental interest income each year. That incremental interest could help people pay for college, go on vacation with their families, or increase charitable giving. Over time, it became clear that Max could also reduce advertising expense for banks, while helping them manage their balance sheets more efficiently. Essentially, Max could take costs out of the banking system, thereby enabling banks to pay even higher yields to their customers. It was a win-win situation — both banks and their customers could be made better off. By bringing greater transparency to the banking market, we could also help restore people’s trust in the banking system, which was important since so many people lost trust in financial institutions following the Financial Crisis.

What most excites you about the banking industry as it is today? Can you explain what you mean?

To me, the banking industry looks a lot like the retail industry. Much like department stores, banks sell commodity products (loans and deposits) through a largely brick-and-mortar distribution channel. I saw what Amazon had done by bringing efficiency to the market for textbooks, and then books, and then basically everything, and thought that a similar marketplace approach could help bring efficiency to the banking industry, reducing cost for banks and creating better outcomes for consumers at the same time. What’s different about banking is that their products don’t require any physical distribution, making a digital implementation of banking potentially much more efficient than the delivery of physical goods. As a result, we see even larger opportunity to help transform the banking market. The resulting efficiencies should make everyone better off.

What most concerns you about the banking industry as it is today? What would you suggest needs to be done to address that?

Many banks still think very narrowly. They worry about losing legacy revenue streams, rather than winning the hearts and minds of their customers and truly owning customer relationships.

A more open-architecture approach to banking can help restore trust and satisfy customers that their bank is truly looking out for their best interest. We spent the pandemic building solutions to enable banks to build trust and become the epicenter of their customers’ relationship with cash, which is the most elemental of asset classes. If your customers trust you with their cash, they’ll trust you with credit cards, mortgages, and investments, too.

Rather than try to sell their own products, banks need to become more open architecture, delivering the best products and services to their customers, regardless of who manufactures them. In doing so, banks can develop a trusted relationship with their clients. In turn, these clients will share their hopes and dreams with their financial advisors, who they know are looking out for their best interests. Only then will banks be able to create true emotional connection with their clients. That’s how you turn a commodity relationship into a trusted relationship. And I think that’s what will separate the winners from the losers as the banking industry is transformed by the same forces that revolutionized the retail industry.

How would you articulate how the concept of money has changed in recent times? Is it really a change? How is it still the same? Can you explain what you mean?

Money plays three important roles in our society: it is a unit of account, a store of value, and a medium of exchange. The digitization of money has made it faster and easier to transfer funds or exchange money for goods and services. The advent of Apple Pay is probably the most important recent innovation in money, in the sense that payments start to become frictionless. When you take payment friction out of customer experiences, you can form a deeper emotional connection with customers and increase their propensity to pay.

By contrast, for all the talk of cryptocurrencies, functionally they don’t meet any of these three basic definitions of money and may ultimately be of limited utility or value. Certainly, the idea of a digital currency that can support micropayments that easily traverse borders is compelling. However, it will be interesting to see whether any of the new cryptocurrencies can meet this challenge, or whether a digital version of the U.S. dollar will ultimately prevail. After all, the dollar is protected by a robust regulatory framework, Federal deposit insurance, and global acceptance.

Based on your vantage point as an insider in the finance industry, what innovations should we expect to see in banking in the short and medium term?

The ongoing digitization of banking will open up many new opportunities to embed finance in other apps or customer experiences, blurring the lines between traditional finance and other goods and services. Looking forward, will banks still play a central role, or are companies like Amazon better positioned to truly own the customer relationship, delivering financial products and services along the way and leveraging customer data to provide new forms of advice in profoundly different ways? Only time will tell, but I think we’ll see more household consumer brands enter into the space soon enough.

How has the pandemic changed the way banks interact and engage with their customers?

Pre-pandemic, there was still a large cohort of customers who didn’t feel comfortable with banking (or engaging in other financial transactions) online. With widespread branch closures, customers were forced to transact online, and many grew to appreciate the convenience of online banking. As a result, the pandemic helped accelerate many of the forces that were already underway.

In your particular experience, how has the pandemic changed the way you interact with, and engage your customers?

As a fully digital platform, we were already prepared to go paperless, work remotely, and fully serve all our customers’ needs without any physical presence, so our business wasn’t disrupted physically. However, the massive fiscal and monetary stimulus drove down interest rates to historically low levels and flooded banks with so much cash that interest rates hovered near-zero. Despite these pressures, the MaxMyInterest platform has been able to continuously deliver the best rates in the market, and our back-testing analysis found that Max was able to out-perform even the largest online banks by 0.21% over the past one and three-year periods. Now, as rates are poised to rise, Max is particularly well-positioned to help serve customers with the best cash management solution in the market, so even in the midst of the highest levels of inflation we’ve seen since the 1980s, Max can help investors keep on top of the best rates and earn the highest yields on their cash while keeping it safe in their own bank accounts.

In my work in the telecom space, I’m very interested in the importance of user experience. How much of your interactions have moved to digital such as chatbots, encrypted messaging apps, phone, or video calls? How has this shift impacted the user and customer experience? What challenges do these apps present when used as a customer engagement tool?

We primarily interact with our customers through digital channels. We decided early on that we never wanted clients to have to call a 1–800 number or navigate menus or listen to hold music. Instead, we offer multi-channel support, primarily through email and in-app widget that makes it easy for users to take a snapshot of their screen so that we can see what they’re seeing. This enables us to research each customer’s question or situation and provide prompt, comprehensive advice in a highly efficient and responsive manner.

If you could design the perfect communication feature or system to help your business, what would it be?

Well, I think Slack beat us to it! Our team loves communicating via Slack. Early in the life of our company, we worked with a consulting firm in Chicago, and they gathered our team in a large conference room and asked each person how they’d like to be contacted, how they never want to be contacted, and how best to reach them in an emergency. Amazingly, every person around the room had a different preference. Some liked email but preferred a text message if it was urgent; others said they preferred to communicate by text but never wanted to be called on the phone. No one could agree on how best to communicate. Then Slack came along and changed everything. Now nearly all (non-confidential) internal communications take place via Slack, and we even engage with a lot of our partners and vendors through private Slack channels as well.

Fantastic. Here is the main question of our interview. What are your “5 Things You Need To Create A Highly Successful Career In The Modern Finance, Banking and Fintech industries?

Success in any career requires dedication, hard work, and great mentorship along the way. To be successful in finance, I think you also need to be intellectually curious and a creative problem solver.

Dedication and hard work are obvious. Few people can master a skill without consistent and repeated effort. Not only does such repetition build muscle memory, it also helps with pattern recognition, enabling you to spot differences, nuances, exceptions, and apply past knowledge to present events to come up with the best solution to any given problem.

But hard work isn’t sufficient. You also need great mentors and role models to instill good judgement and level-headed thinking so that you can learn to make good decisions, particularly in periods of acute stress. Your reliability as a person who can make logical and ethically-grounded decisions is imperative in an industry where you are often entrusted not only with large sums of money, but also the ability to impact thousands of lives with your decisions.

Finance is also an industry for innovators and creative thinkers. The financial services industry is in a constant state of creation and creative destruction. People who are able to see the world slightly differently can often spot opportunities that others miss. And this is where intellectual curiosity comes into play: to be successful in finance, you need to be willing to question why things are the way they are, and whether there might be a better way to achieve the same outcome.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

I’m a big believer that you can only achieve what you can envision. That’s why it’s so important to expose young people to a much broader range of careers and opportunities, to travel and see how other people live, to go to work with your parents and see what they do for a living and determine why you might want (or not want) to follow in their footsteps, and figure out what you need to do now, as a kid, to accomplish your dreams.

Exposing children to different ways of life can be very impactful, whether that means traveling to another country or visiting an aunt or uncle or cousins who live in a different income bracket. Children grow up thinking that ‘normal’ is whatever is normal to them, but the reality is that there’s so much opportunity to create your own life which may differ from how you grew up. Whether these new experiences build empathy or create ambition, getting outside of your comfort zone can be extremely helpful and could likely help us reduce the political polarization that plagues our democracy.

I was fortunate to grow up in a house where education was highly valued and it was a baseline expectation that everyone would go to college and graduate school, but I never traveled abroad until college, and didn’t live in another country until I was in my 30s. Moving to Japan — where I didn’t speak the language — was a humbling experience, but also helped me view the world in a very different way and helped me see opportunities I wouldn’t have identified had I stayed in New York.

Creating more opportunities for young children to move around their communities and travel around the world could help engender much greater global understanding, empathy, creativity, and productivity, and perhaps could even reduce global conflict as we raise a new generation that has a visceral understanding that what differentiates us is also what can unite us.

How can our readers further follow your work online?

Check out our website, MaxMyInterest.com. You can also follow us on Twitter @MaxMyInterest and connect with me directly on LinkedIn. We also share broader thoughts and musings on the industry via our blog, which can be found at blog.maxmyinterest.com.

Thank you so much for the time you spent doing this interview. This was very inspirational, and we wish you continued success.

Thank you.