>>from >>around >>The globe. It's the cube with digital coverage of IBM think 2021 brought to you >>by IBM. Welcome back to IBM Think 2021. This is the cubes ongoing coverage where we go out to the events in this case virtually to extract the signal from the noise. Now we're gonna talk about one of the deepest customer relationships in the tech business with Pete Bill, who is the IBM managing director for American Express. Pete, great to see you. Thanks for coming on. >>Thanks for having me Dave. >>So as I said, this is one of the deepest vendor client relationships. I mean, it's more than that because you're not a vendor, your partner, very deep relationship, many, many, you know, decades plus uh, executives know each other. There's been a some senior executives from American Express as I recall, came over to IBM of course, famously Lou Gerstner um, but but talk about the, just give us the overview of the evolution of that partnership. >>Yeah, well, as you rightfully mentioned, uh the relationship is long and deep, its over 100 years. I mean the original deal was probably around the club buying clocks and uh scales and all that kind of stuff and it evolved over time. But what it does indeed create is a long deep lasting relationship as a fundament for doing business and uh yeah that business has gone through a lot of cycles over the last decades, as you say, uh from from buying stuff. But I would say over time evolving really into a partnership around services, mutual business back and forth, exchanging executives on board level american Express executives on the board of IBM and vice versa. So yeah, it's a very very deep long relationship of two iconic companies in in Manhattan. >>Yeah, so it's got to be more than just buying stuff. Obviously there's a lot of business being transacted but you've got to intimate your title has american Express in it. So you've got to intimately understand your client's business. I mean that's I guess that's always the case, but we're taking it to another level here, >>aren't we? Yeah. Yeah, absolutely. I mean, so what you really are after and what we do is IBM is really get into the shoes basically of american Express trying to support their business to their clients. So american Express is very focused on small and medium business. So we tip into how can we help the small and medium businesses part of the american Express custom set and how can we help evolve their business models, that technology their services to serve their clients better because in the old days indeed. To your point it was like, oh we wanted to buy the right stuff and then we use that to do our thing. But that the technology today, the area in which we operate is completely different. If you don't understand the the client of american Express, we cannot serve american express as a company. So it is indeed very important and it is therefore deeper and it requires way more focused on the clients of american express than in the old days I would say. >>Well the pandemic must have been a challenging uh environment. Of course. I mean you know people aren't out shopping as much although you know people are waiting, they can't wait to get back out. They say it's gonna be like Woodstock with the american express cards. But so so maybe talk a little bit about how how you work together during the pandemic. >>Yeah. So well first of all like anybody, we're all work from home. But american express really uh I would say almost reengaged on what is core and the threat that used to support to small and medium business. So american Express started this stand for small initiative led by steve Square himself about how can we enable the small enterprises uh in doing business in the covid period? What do they need? I mean, yeah, they need money, but they also need help like how to deal with your financials with your people. Can we use the spare time to do more education? And so IBM was one of the partners that jumped on board immediately to say, okay, let us help in that platform support you were necessary with the platform but definitely help you in that platform to reach out to the small and medium enterprises uh specifically in the new york area. And like many other partners, we all got on board and I think it got another focus. Again, I mean small and medium business has always been a focus, but it's different when so many companies are struggling right now. And so we get a got on board. And I think that that is really a very clear partnership expression. I would say, >>how do you measure success with with american Express? What are some of the key things that you guys look at? How, how have you evolved that over time? >>Well, ultimately, I would say it's client satisfaction in the end, it sounds like an open door, but it really is. I mean the real the real measurement, I mean there's always money measurements back and forth. You can argue that that is of course you need to do solid business. There's no discussion there, but I would say it's where do we align on the strategic intent from both companies and let me elaborate a second on that one. If american Express is really transforming its business to become way more, I would say uh cloud enabled hybrid technologies enabled. Uh we provide a lot of that material. Uh so we are really working together on trying to leverage each other in building that hybrid platform that will enable that future. And why do you need that? Well, because american Express needs to be dynamic and getting fit, excellent board, getting exchanges with with with with new companies going way faster. It's not a traditional old style anymore where you could go for transformations for years now it needs to be on the spot. Um so we show our strategies are really well aligned and I would say the real measurement of success is how can we now make that to the benefit of american Express? And on the back of that we will do good business. So uh client satisfaction should be the primary one. Strategic alignment important. And then of course doing the sound business on the back of that for both sides, >>financial services firms have always been pretty savvy when it comes to applying technology to business some of the most demanding customers and more advanced. Uh So you know the american express is likely already on a digital transformation prior to the covid hitting at the same time. It talks about it being accelerated. But I think what people miss is that it wasn't well they don't miss it but you know to think about it in this way, it wasn't planned, it was like forced. And so you just you have no choice, you couldn't think about it, you just have to do an act. And so on the one hand, okay, that's good. It was a forcing function. It also served as a Petri just but on the other hand, I'm sure a lot of mistakes were made now as we exit the pandemic step back and say okay wow, we learned a lot now. We can make a more planned full approach and really go deeper and lean in over the next several years. What are your thoughts on that and how does it relate to what you guys are doing with american Express? >>I think that's a very good point. I agree. It's what you see is that uh this indeed has forced us in a lot of things. I mean I think the good news is american Express was already enabled for a lot of that new technology. They have invested, they have a lot of very skilled good people uh a very clear strategy and what they were after this and they put more pressure on it. I think what you will see happening in the foreseeable future after we get out of all of this is that the, let's say the urgency to complete the transformation on cloud and data will become even more crucial. And so the priority will become higher and it will not be just higher because of the Turkish wanting it to do it, but because the business needs it. So uh needed from a risk perspective, they needed, from an agility perspective, go to market of new products. Uh they need to really move fast. It's a fast moving market, you get a lot of the media competition is there? Uh so to enable that the move to get new technologies and faster is becoming pivotal and crucial. And I think for now it's more of almost like a survival statement. We need to get through this bubble of Covid as soon as that's done, we need to think way more on the structural elements of debt and how we enable a hybrid strategy going forward. >>So in the spirit of you need to understand your customer in this case american Express and understand their business. An american express is uh make you laugh anytime I call american Express, you know, if I have to work out a problem or whatever. Uh and I gotta talk to some customer service. They always thank me for my loyalty because I have been a customer for a long time. You know, back when probably when Ronald Reagan was president, it was my first Amex card. And so they're like, oh thank you, Mr Volonte. We we really appreciate your loyalty. So loyalty is a big thing for american Express with its customers. So what about IBM and American Express? How are you breeding, you know, what's that loyalty factor look like for you guys? >>Yeah, I think it's a very important element. I mean to your point, I have the same experience, It's it's a it's a crucial element. Uh the whole, I mean american Express is famous for its loyalty schemes for loyalty as a company. I think loyalty like the business has evolved, I think the loyalty evolves in the same style in I would say in the in the in the old days, I would say the argument was you need to have the best product, you know, you you need to be and then we'll buy the product in the current environment. I would argue that it's way more about skills, Do we have the right people? Do we have the right technology strategy kind of stuff? I would say for the future, it's way more about do we have the right trust, commitment and loyalty of the people that work with us going forward to serve the client needs? And I think that evolution, it's almost like you have an industrial revolution, there was an information resolution. I think there's more of a loyalty revolution coming up where the real differentiating factors is because we can study this and argue this for ages. But a lot of parties will deliver a lot of good technology to the market, they will deliver a lot of good people, they will have good price points. So what's the real differentiating factor? It's like, do we really trust these people? And then I think relationship loyalty will really come and play and it will not become and play just between an IBM and an american express, but I would argue it will come and play in the whole business cycle of american express to their clients. I mean if the credit card swipe of your american express card in a shop fails, It needs to be my problem. If I deliver the service to American express it cannot be that Oh American express has a problem and you know what, it's 8:00 in the evening uh yeah we have reduced services. No we never had that, we will never have that but we need to get even deeper in understanding what the effects are of these business issues. >>Yeah I mean you're right the nature of loyalty, the preservative products have changed. I mean I remember you know I used to travel overseas with american Express traveler's checks that was a staple of every overseas trip that I ever took you no matter where I was going, whether it's asia pacific or or europe, I had to have that packet and I and I had you know, there were times when, when you know one time particularly had a problem film, they were right there to solve the problem. Of course, many young people in the audience don't even know what american express traveler's check is. They probably don't know what cash is carrying around crypto in their wallet. But but but that's an example and that's about trust, trust that product, I trust that company behind the product. Again, that has to extend to your relationship doesn't. >>Absolutely. So the technology that an american Express users, whether they do it themselves or whether it's provided by partners like IBM it needs to be seamless because let's face it, you would not be interested to know who provides you the security on your credit card. If you have an american Express card, you expect expect american Express to deliver your the security that you need and whether american Express delivers that or IBM you couldn't care less and you shouldn't care less. But what it does require is that in the old school I would say it was more like okay we'll give some services and some products to american Express and guys could look now, we need to think ahead and I think that's where the power of IBM comes in where that we really attuned by industry to the industry issues like compliance, security, stability services, um to the inclined to you. So you need to feel if I cannot explain what I do to american express in your terms as an infusion of an express credit card, you can argue what's the real value add. And definitely if there's like 345 parties playing exactly the same game, it needs to be differentiating and I think a company like IBM we have differentiating value but we need to make it very clear and that's I think where you see companies like american Express really work together and that's what loyalty and trust really comes in play. >>Last question when we got to go is you have american expression, your title are other companies jealous >>we >>want that >>to, they should, they should >>be. Uh >>but I I must say, I mean we deal with a ton of financial institutions as you know around the globe including the other credit cards. But yeah, I think where these deep relationship ships commonplace indeed too. I mean they're so old, so deep, so and entrenched and it really start there's different dimensions to it and it's not always that hard coded anymore, it's the subtlety of really relying on each other. I mean when something happens in the middle of the night with american express, all of IBM is on board as of the second and it's not driven by contracts or by anything. It's by people that have an American Express logo on the forehead and work for an IBM. >>Yeah. Right. It's awesome. Pete Pete bills. Great story. Thanks so much for coming to the cube. It's great to have you. >>Thanks for having me. >>All right and keep it right. There is day volonte ongoing coverage of think 2021. You're watching the Cube? Yeah.