Q. What are your top priorities for 2018 and how is technology transforming a legendary brand like Western Union?
My top priorities might surprise people who don’t think of Western Union as a profoundly digital financial technology company. We will continue our investment in robotics and machine learning to automate routine tasks, enhance our predictive modeling for things like fraud prevention, and reach new customers with even more personalized experiences. Improving security frameworks and tools is another priority, such as expanded use of biometrics and other forms of cyber detection and prevention. Finally, we’re focusing on technology that fosters deeper employee engagement, including how we do our work in more global and converged networks. Our technology partnership strategy will also be a big emphasis for me in 2018.
Though I can’t get into specifics right now, the most valuable innovation in our sector will emerge from new alliances between financial institutions, fintech start-ups, governments and other non-traditional verticals – and CIOs need to lead from the front.We’re in a unique position to bring value to businesses that want to offer money transfer and payments capabilities directly embedded in their own offerings. We’ve already been piloting this with partners like Facebook Messenger and Viber, for example, making it possible to send money directly within a texting conversation.By tapping into the vast reach of our cross-border, cross-currency backbone, partners can provide proven, trusted servicesand rely on our robust compliance programs, algorithms and risk management practices – infrastructure thatwould be prohibitively expensive for partners to build on their own.
"The most valuable innovation in our sector will emerge from new alliances between financial institutions, FinTech start-ups, governments and other non-traditional verticals – and CIOs need to lead from the front."
Q. What’s your point of view on Bitcoin and the impact of cryptocurrency on financial services firms like Western Union?
We believe physical currency as we know it today is not going away.Cash is still the predominant form of payment in most of the developing world, and it’s difficult to see that changing soon. If the customer demand for virtual currency was there, it would be easy for us to incorporate. Western Union is well positioned to connect the cash and digital worlds and we’ll continue to leverage our capabilities where we see opportunities. Until then, we’re taking steps likeinvesting in the Digital Currency Group and experimenting with blockchain, which could potentially make settlements more efficient if the ecosystem scales and the market gets built around it.
While we have a huge competitive advantage now, I just wish our cloud big data journey had started years ago. Now, our technology platform is founded on a Hadoop big data technology cluster that is used for conversion analysis, risk statistical modeling, as well as payments and risk data processing.
One of the factors driving our digital transformation right now is the huge amount of transactional data that we’re generating as we serve our customers. We’re the largest network in the world to physically take cash in on a daily basis and digitize its value. Western Union’s global cash payout network has more locations than all the McDonald’s, Starbucks, Subway and 7-11 locations in the world combined.
When you consider our global footprint and that we’re moving money across 16,000 corridors, 130 currencies and 200 countries –vetting these transactions as they happen against millions of records and compliance checks – you get a sense of the scale of what’s happening under the hood for money transfers to go through in minutes. Our investment in cloud platforms is core to our omni-channel strategy and ability to provide the same level of service that customers expect across our retail agent network, website and mobile app. Our digital strategy is paying off: over 65% of our transactions are now initiated digitally.
We like to think of ourselves as the 166-year old start-up. It’s in our DNA to be innovative and we have a history of disrupting ourselves without cannibalizing our core business. But that doesn’t mean we’re complacent. It takes work to ensure we don’t have any blind spots.
Our San Francisco lab, where our mobile and partner initiatives have been incubated, is just one example. We created this operation from scratch six years ago with the specific mission to lead the company’s digital transformation. The fact that our executive team and board supported this initiative from the beginning says a lot about the company’s commitment to innovation. We’ve invested in engineering, recruiting developer talent away from companies like PayPal, eBay, Cisco and other Silicon Valley giants. We’re changing our cultural metabolism, too, instilling an “experiment and fail fast” mentality that enables us to bring innovations to market faster. I think another factor is the idea that good ideas come from everywhere – it’s not just from the top down.
Appreciating and recognizing technology adjacencies will help drive transformation.What were once perceived as unique or distinct markets are finding convergence. We see this in companies that are continuously extending themselves, using digital as a strategic advantage. Many would never have thought we’d be buying our groceries online or using crowdsourcing to transport us from point A to point B.
Weathering disruption and seizing pivotal transformation moments means investing in R&D and digital, finding ways to integrate, andbreaking down the myths that new channels are going to cannibalize business. For example, even though we have a huge cash network, we brought digital to cash through our mobile app-initiated retail concept. The outcome: Now the majority of our customers do all the transaction paperwork digitally ahead of time.