customers would use a bank during office hours, and phone banking after hours. “The world has evolved — information services are at everyone’s fingertips on their mobile phone.”
Openness and inclusion
Corporate vice-president, chairman and CEO of Microsoft Greater China, Alain Crozier, says over the past decade Microsoft, already a leader in the industry, was forced to redefine its mission and culture to be much more customer-oriented.
“A major culture change was to open the mindset of our employees. Not just provide technology for technology’s sake, but bring the best for our customers, no matter where they are.”
Crozier says “what was yesterday’s competitors have become today’s customers”. He says Microsoft is opening up its technology so it can be integrated with all other technology.
“The notion of openness and inclusion is fundamental. The power and development of new services will come when you bring data together in one common platform that will help serve customers better.”
Shirley Yu, group general manager for Visa Greater China agrees: “Visa believes in collaboration. It is critical not to restrict others from coming into the market, but making sure we have standards that ensure there is interoperability.”
She points out that even though Visa was formed 60 years ago and could be considered the original fintech business, its ability to adapt means it remains among the biggest.
“If you look at our organisation, more than 50 per cent of our people are in technology,” she says.
“We went public 10 years ago. In the last seven years we have tripled our market cap because we are transforming and changing how we serve our clients.”
Yu says Visa’s core competency is scale; it has 47 million merchants in 220 countries that use its service.
She says Visa is open to new technologies and willing to collaborate with fintech organisations because although the new technologies can be disruptive, Visa can leverage its scale and provide new ways to serve its clients. In order to stay ahead, Yu says Visa is prepared to change everything it does — including its business model.
As an example, Visa has traditionally focused on serving the most affluent.
Yet studies the company has conducted into millennial behaviour have shown younger generations are not attracted to the traditional Visa rewards programme.
“If we focus on the affluent it brings a lot of business for us, but we have to capture millennials today, to make sure we capture their life cycle,” says Yu.
“They want instant gratification — so we’re rethinking how we design loyalties.”
From batch to real-time
Tony McLaughlin, Managing Director, Emerging Payments and Business Development, Treasury and Trade Solutions of Citi, says changes taking place in the payments field are “visible and stark.”
He says cryptocurrency and other distributed ledger technology present a radical vision of the future of money, which could ultimately lead to a re-engineering of the fiat currency system.
But the other major change McLaughlin has seen implemented by many countries in a much quieter way is real-time payment systems and open banking.
“Cryptocurrency is the noisiest development, but the true story is the quieter movement from batch to real-time — that’s where the real action is,” he says.
McLaughlin explains banks are still built on batch processes, which doesn’t marry up well with real-time banking. Payment systems like AliPay, WeChat Pay and open banking in the United Kingdom are all part of the shift towards a 24/7/365 system.
He says the concept of end-of-day and cut off times are all artefacts of batch processes, and the transition into real-time is going to be enormously challenging.
“Organisations can delude themselves for a long time milking existing business models.
“In this day and age, banks must see the writing on the wall if they don’t adapt,” says McLaughlin.
