Challenges in payments: Europe vs. Asia
I think the challenges are the same. What is happening in other countries outside Europe is the ability to take the technology leap. So you don’t go with the existing infrastructure, you can go straight to mobile. You can look at M-PESA in Kenya, for example. It’s a bigger challenge in Europe because the legacy systems have been in place for so much longer. So I think the journey and the direction that they want to take is the same, but the place they are starting from makes it easier or more difficult depending on where in the world you are.
What are the latest trends in payments in Europe?
I think that the key thing that is driving customer interests is digitalization of systems, the customer experience and how data can be delivered customers using wallets, contact lists, and things like that. So that is the big challenge, a huge investment that banks are struggling with, coupled with how they really run their operations. Do they move into the cloud or retain their existing data center? I think both options have advantages and disadvantages. People have to think about this very carefully, and OpenWay is well positioned to help people have these conversations.
Challenger banks vs. traditional banks: who is going to win?
The challenge of challenger banks is that they’re providing a very niche service. They’re not providing everything that banks do in terms of mortgages and what you need to do for the rest of your life. Challenges for existing banks are keeping retail banking current in the minds of people, but they also have lots of other parts of their business that’s not going to change. Also, we will see how regulators are starting to catch up with the challenger banks and the startups that have not necessarily been flouting the rules as of yet, since they haven’t been regulated. But as they come under pressure from regulators, the systems they’ve designed themselves have to meet specific standards. So they should be talking to OpenWay about what it can do for them rather than thinking that they know best!
What is special about OpenWay’s cloud project with Enfuce?
Enfuce is an interesting company, a startup founded in 2016. They adopted a cloud-native solution but decided that they needed to migrate to WAY4 to open their business so they could achive growth in different countries. I think from an OpenWay perspective we are helping them achieve that growth. When we spoke with them in 2017, Enfuce had nine employees, as we sit here today they have about 45. They’re onboarding and going live with possibly 4 or 5 new clients in the June-July period, and they will be the first new clients since the first day of the company when they just had one customer running for the last three years.
What do you think about digital wallets?
I think the biggest thing is still wallets. The biggest conversation is: what do you mean by wallets? Many people have a slightly different view of what they mean by a wallet. I do question how many wallets people are going to want at the end of the day. I mean, we all have one wallet that we keep our cash and cards in, so why do you want five wallets on your mobile phone? Then the challenge if it’s a merchant wallet is do you just want loyalty, or do you want to do contactless payments? That’s got a long way to go, I’m not sure if we’ll all end up putting chips into our hands and wrists, but I think the mobile phone is still the most powerful tool that any organization will want to leverage going forward.
How can a bank adopt the mindset of a startup?
The biggest advantage of a startup is trying something, seeing it fail, then trying something else in a different way. It’s not in the mindset of a lot of traditional banks. I think that’s why we have seen something like Goldman Sachs where they got rid of a lot of traditional staff that you would see in a bank in favor of recruiting a load of people who work with CNI, APIs, and things like that so they can change their mindset. People inherently don’t like change. And so if you have a bank of 15, 20, 30 thousand people, most of those people will not want change. But they have to change. Sometimes the only way to bring about change in an organization is to clear out old staff and bring in some new. If you look at startups and look at a company like Enfuce, what they achieved with nine people is very, very impressive. They have 49 people on their staff because they’re running different systems, they offer four solutions to the market. But they are amazed that they’re sitting here with some of our other clients who are offering the same business, but with teams of 300 people. They don’t quite understand that.
What do you like about working in the payments industry?
I’m kind of a strange person, I quite like change, the fact that there is movement, challenger banks with different ways of doing things, even if the end result is the same. The payment industry is a bit like the banking industry itself. Before, you had a bank manager that your parents would go and sit and talk to, about getting a mortgage, getting a credit card or something. Whereas today, you click something, bang, it’s in the post. So we’re getting into a very dynamic business. Rules and regulations are a pain, but they also honestly assist companies like ourselves in forcing us to modify, update and provide additional solutions to our customers so it’s a double-edged sword. Our customers don’t like it, but for us it’s quite useful!
What value does OpenWay Club bring to participants?
Getting customers together is really important, allowing them to discuss their business challenges, how they’re meeting market needs, having them present their solutions to a wider audience, allowing OpenWay to present some of our new ideas. I think it is a vital thing that must continue.
