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Disruptive Innovation: Banking 2030 (Davos)


Where are we headed and how will we get there? Industry leaders guide this engaging conversation in Davos that covers the potential of cryptocurrency, the critical element of consumer trust, the consequences of consumer empowerment on data privacy, digital identity and more. Speakers are Ann Cairns, Vice-Chairwoman of MasterCard; Hikmet Ersek, CEO of Western Union; and Laurent Le Moal, CEO of PayU.

Below are the highlights from this robust conversation. Watch the full discussion here.

On the importance of trust:

Ann Cairns, Mastercard:

“Trust is very central and I think trust is very fragile. We see so many places where it is breaking down, whether where it’s between the citizen and their government…or from people questioning, Who do I want to do business with? Who do I want to partner with? And from a consumer point of view, who do I really want to leave my money with? Fundamentally, I think we need somewhere we all feel safe to keep our money, and that place isn’t out there in the ether. We also need somewhere that we feel very safe with our data…I think the more technology you put in the hands of the consumer, the more technology allows the consumer to have control of their destiny, and then the more they feel comfortable and in control…People don’t want their info out there. People are going to trust companies that put them first that make them feel safe.”

Lauren Le Moal, UPay

“I think trust can be manufactured…and will compound over time It’s about promises being delivered to your consumer day after day…. You can use data to start earning the trust of the consumer. It’s not about sponsoring the Olympics or trying to create a big brand. It’s about promises being delivered.”

On maintaining long-standing trust, while injecting urgency and disruption to be a vital company:

Hikmat Ersek, Western Union

“It’s not either or, it’s both …. We have 150 million customers worldwide, who trust us, [who trust] that the money will really arrive…Fintech is fifty–fifty, it’s fin and tech. You can be the best tech company there is, but if you lose the trust part (of the consumer), you’ll never be used. You have to really get the trust part to be successful in the tech part.”

On access to data and how data can build trust and protect consumers:

Laurent Le Moal, PayU

“Everyone has data, everyone says, ‘I’ve got billions of transactions’, but in reality, when you look at the data, it’s is not structured, it’s not useable, and it’s really a mess. When we invest in start-ups, we ask: can I get access to data?…Fundamentally, you have to build a data business and then start feeding the whole ecosystem …because the money is there for equity, the money is there for depth…but you can’t manufacture access to data, and that’s the key for a lot of fin-techs when they want to scale… and it’s a huge opportunity.”

Anne Cairns, Mastercard

“The great thing about AI is that they can use behavioural data to protect you. For example, if I put my phone down now, and you picked it up and tried to make a payment, our technology would [catch] that the keystrokes are different, without knowing anything else about you, and [based on that] would be able to stop the transaction…I think data is super important for the future, but I think it’s important to come back to trust. Who do you trust your data with? If you are working with a company that says: I don’t want to know anything about you, I’m not going to use your data to sell you things. I think people feel much better, more trusting of that.”

Hickmet Ersek, Western Union

“Data is such an important tool for us to build trust. Our customers give us their data because they trust us…we use data to build trust with the consumer, but at the same time, we use the data for anti-money laundering. We do artificial intelligence based on the data we learn daily, and we see how customer behaviour is changing. If somebody who always send money but changed their behavior changed, did their behaviour change because of …something unethical? We can see that from data…This is the data that is very important for building trust with 99.9% of consumers.

On areas that are ripe for disruption and reinvention:

Ownership of digital Identity – Lauren Le Moal, PayU

KYCs is a fundamental part of financial services, because everything is linked to identity…But by 2030, we could be living in this dystopian world where your government knows everything about you for security purposes, and this could trigger a lot of decisions. Who will own the identity? Who will give you the [ability] to have true ownership of your digital identity? This will be key for those of use in financial services. Is it going to be a private company, like Google or Facebook? Is it your government? Is it going to be a decentralized organization that gives you access to your digital identity and portability of that identity? …This has ramifications for us as financial service providers, because we need to be able to identify KYCs. So where do we go to [for that]? We talk about empowerment of the consumers, but the first thing is: who owns my digital identity, and how do I get access and control over it? There are a few start-ups working on this, but it’s going to be complicated. That’s why we are spending some time on it.

Financially–inclusive products that are globally relevant – Hikmat Ersek, Western Union

“We are sometimes too big to make changes fast enough…and sometimes we are too slow to adapt to customer needs, especially a global organization like Western Union. Because you have to adapt to the needs of a person in Peru, at the same time, to the need of a person in Vietnam, and to the US and in Finland. You have to offer products which really responds to the global environment…I think that is the solution we are looking for: How do we satisfy the needs of 7 or 8 billion people in the future?”

Disrupting the world trade space – Ann Cairns, Mastercard

“I think the area that is really ripe for the biggest disruption in the world trade space. I think it is, to do with giving SME’s access to the markets around the world. We know that’s a hugely underserved sector everywhere. Because if you look at the trade space today, it’s full of paper and lots of things go wrong. [On the] exporting and importing the logistics side, the money doesn’t move with the information. It’s just a very difficult area, so I think we are going to see massive change in that area in the next few years.”

Cyber protection – Ann Cairns, Mastercard

“I think everyone in the world is thinking about cyber protection… We know cyber criminals go after companies that don’t protect the information that they are holding…We are already seeing that the consumers are becoming very well educated about where is it safe to give their credentials and where is it not safe. They’ve seen failures in the companies…. And the technology is moving in a way, that when you look at my phone, where did I actually give my credentials. Yes, you loaded it into iTunes, you loaded it into Uber, but maybe there’s lots of other places besides. Now we are inventing technology to make it transparent for everyone.. [it’s] a button for you to switch those on and off…Unless companies become very, very good at cyber protection, then consumers are going to move to the off button.”