There are a few core trends that I see resonating across the industry; all have to do with providing ease and convenience for the customer and the capability to move money in minutes. The first is a firm’s ability to provide payments and transfers in real-time. Customers demand instant gratification, which means a firm’s ability to eliminate 3-4-7 day delays, is crucial.
"One of our primary goals is to effectively communicate with our customers between transactions"
Here at Western Union, we are increasing the number of ways to move funds into our system for cross-border money transfer and cross-border payments by expanding our digital and retail footprints, and by focusing on our ability to offer physical, mobile and digital services wherever we can. To us, it’s all about continuing to find ways to take the friction out of cross-border transfers to provide ubiquity in our ability to meet our customers—where they’re located, while offering choice and diversity for how the transaction is made, when and how they choose to do so.
First and foremost, it’s customer identification, then subsequently protecting the customer’s identity. There are a number of areas where Western Union is researching or investing in technology to help achieve this including biometrics, 2-factor authentication, device finger printing, and behavioral analysis.
We have taken steps to eliminate hacks and account takeovers, this includes providing identification during registration, and acquiring key signature items as to how a customer registers such as capturing digital location details, device components and electronic device signatures and informational profiles. In addition, the company is using statistical models and real time scoring to manage digital business risk, as well as real-time risk assessment tools for compliance and fraud management.
These technologies have allowed Western Union to move with more agility. They have also opened up new opportunities for the company to secure additional data for fraud and risk analysis in real-time.
One of our primary goals is to effectively communicate with our customers between transactions. On average, they only transact with us a half-dozen to a dozen times a year, so we need to engage with customers about what matters most in between transactions, so that when the money transfer need does arise, we are top of mind. These technologies provide marketing opportunities in all aspects of a customer’s life and provide Western Union with the ability to monetize our contact points with our customers.
Automation and digitization of Western Union’s transactional workflows have helped the company remove tedious, costly and time-consuming intermediate steps in a transaction–freeing up employees’ time to focus on more crucial tasks at hand, while eliminating costly and time consuming tasks traditionally done on paper. These advanced workflows not only benefit the company, but provide for a more simplified and easy transaction for the customer, improving overall customer experience while reducing costs.
I believe block chain does have a place in the financial ecosystem, including areas such as smart contracts and global ledgers. I believe it also has the ability to simplify correspondent banking and provide real-time settlement capabilities.
Bitcoin is still in its early days and has challenges with transparency. Law enforcement and regulators still have a long way to go toward safeguarding this capability. In addition, central banks have traditionally had tight control over currency. They too have a long way to go toward providing that same level of oversight they have with currency when it comes to digital currencies.
Over the past several years, the industry has experienced a dramatic increase in regulation. With increased investment and deployment of technology that provides speed, ease and diversity in how a customer transacts, the industry has entered a new world of how it conducts business, so I do not see regulation easing anytime soon.
Looking ahead, I see additional regulation that addresses identification, privacy and consumer rights on a global scale, adding additional complexity when it comes to cross-border money transfer.
Fortunately, Western Union’s global FinTech cross-border platform provides the technology, foreign exchange conversion and settlement, regulatory and compliance infrastructure, and data management that brings its network together and allows for efficient and timely money movement for multiple use cases almost anywhere in the world. It is this business model that allows the company to operate in more than 200 countries and territories worldwide, transact in more than 130 different currencies, at a rate of 30 transactions per second.
There’s no doubt the financial services sector is a target for criminals and cyber attacks. The challenges seem to increase on a daily basis with attacks becoming more and more complex. This creates a huge burden and responsibility for an organization’s CTO. In this regard, he or she must have “defense in-depth,” including many layers of security.
Insider threats is another important issue to address, so it is crucial that organizations understand normal employee and contractor baseline behaviors, while ensuring a culture of security where those internal to the organization understand how they may be used as a conduit for others to obtain information. Finally, it is important for the CTO and his/her team to constantly monitor the ever-changing outside world of IT to stay up to speed with the external threat landscape. The firm’s ability to respond to an attack is crucial–in a swift manner that ultimately minimizes the impact and recovers back to normal operations as quickly and effectively as possible.
Many organizations are still operating with technologies that are either at their end of life or very complex to manage. It is up to the CTO to simplify, modernize and standardize his or her organization’s technology infrastructure. Many capabilities today are delivered by hardware and software off the shelf, so there is the opportunity to buy ad-hoc and integrate into the infrastructure based on the current needs of the business.
I continue to see various mash ups of firms, creating partnerships to further each other’s respective capabilities. A prime example with Western Union is the launch last year of WU Connect, a technology platform that enables Western Union’s robust digital global money transfer capability to be embedded into third-party social media and messenger platforms providing users with new ways to quickly and conveniently send money to friends and family utilizing a debit card, credit card or bank account. To date, the company has teamed up with Viber and WeChat to offer this capability to their users. In addition, I see organizations placing more emphasis on finding ways to take their APIs and SDKs to market, while keeping a watchful eye on potential disruptors and technologies that impact their IT operations.