Varo’s CTO Sets Responsible AI as a Key Differentiator
Rathi Murthy, who stepped in as the chief technology officer at Varo Bank in March 2025, is steering the digital bank with a clear focus on responsible AI and purposeful technology. She stresses that technology should serve a concrete purpose and deliver real value to customers rather than being adopted for its own sake.
Strategic Hiring to Strengthen Technology Foundations
Recognizing critical gaps after joining Varo, Murthy brought on two key executives: FS Nooruddin as chief architect and Payal Carpenter as engineering strategy and operations executive. Both have worked with Murthy before at companies like American Express and Yahoo. Their roles are aimed at ensuring Varo’s technology remains scalable, secure, and strategically aligned.
Varo, a San Francisco-based all-digital bank, already employs AI in underwriting, fraud detection, and risk compliance. Murthy emphasizes responsible AI’s role in creating personalized customer experiences, making interactions feel tailored rather than generic. She remains cautious about adopting new tech only when it clearly benefits customers.
Leadership Changes and a Clear Vision on AI
Murthy replaced Sachin Shetty as CTO, joining shortly after Gavin Michael became CEO. Both leaders prioritize AI and machine learning to enhance underwriting for low-dollar loans, fraud prevention, and customer personalization. Murthy aims to build a leadership team that moves fast but thoughtfully, focusing on innovation where it truly impacts.
Applying Experience to Build Differentiators
Before Varo, Murthy held CTO roles at Expedia, Verizon Media, and Gap, and was CIO at American Express. She draws on her Expedia experience, where AI was used responsibly to improve customer service, such as summarizing extensive hotel reviews. Her goal at Varo is to use modular technology to accelerate development and create meaningful competitive advantages.
Murthy refers to data and AI as Varo’s “secret sauce,” emphasizing the importance of protecting the bank’s charter and moving quickly to deliver value. Varo’s cloud-native, modular architecture sets it apart from traditional banks that juggle legacy systems and innovation. This architecture breaks banking software into independent components, allowing targeted updates and purpose-driven development.
Customer-Centric Technology and Security
Listening to customer feedback is a priority. Murthy is focused on refining models to distinguish between “good customers” and potential fraudsters, reducing friction for legitimate users. Varo’s technology strategy centers on enhancing customer experience, whether through internal innovation or partnerships like the one with Visa for seamless service.
Security and compliance are embedded in Varo’s tech framework, with identity management, data protection, and continuous monitoring. The bank is advancing its in-house decision platform, Supernova, to better interpret customer behavior and improve decision-making.
Governance and Continuous Improvement
Murthy established an “architecture guild” that includes cross-functional teams from product and engineering. This group reviews all new features and tools, ensuring security risks are flagged and addressed. The approach fosters collaboration and maintains high standards as Varo evolves its product lineup.
With a focus on responsible AI and purposeful technology, Varo’s leadership is building a technology foundation that aims to deliver fast, smart, and meaningful innovation for its customers.
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