Payments are increasingly becoming embedded in other customer experiences, but are just as important as ever for banks, says Westpac’s Head of Payments.
Philip Joyce, Managing Director Payments, Global Transactional Services at Westpac Institutional Bank, points to Uber as an example of where the payment has been subsumed into something bigger than the payment itself.
“You will see far more partnerships between banks – be it fintechs or be it customers – in putting propositions together,” Joyce says. “It will be banks providing some of their capabilities or combining it with a smart fintech or combining it with a bricks-and-mortar company to deliver something that’s got a payment involved in it somewhere but it isn’t necessarily a payment proposition of its own.”
Having the best infrastructure and connections into the clearing stream and being trusted by customers remains important for banks, but they also need to ensure they put the customer at the heart of what they do when pulling together new value propositions. “I think banks can be more than just the rails. I think we bring a little bit more IT than just the connections. But I think there is definitely an increasing realisation that we don’t have everything all of the time,” he says.
Corporate customers are demanding the same sorts of payment services and conveniences they receive as individuals
In the eight years he has been with Westpac, Joyce has noticed an increasing willingness within the bank to work with outside parties. For instance, Westpac has partnered with and invested in Hey You
, a geolocation app which highlights cafés near the user then lets them seamlessly order and pay so their coffee is ready when they arrive at the café. The Hey You app can also be accessed in the Westpac Live
app. Joyce says corporate customers are demanding the same sorts of payment services and conveniences they receive as individuals.
“I always talk to CFOs of companies and they kind of look at me and say, ‘Well, look, as a consumer, I can do this great stuff on my mobile app and yet, when I try and do some work in my corporate I’ve got to go through some really clunky interfaces and I’ve got to send in a bunch of papers to be on-boarded’,” Joyce says.
Consumers cutting back on apps
The developments come as consumers try to reduce the number of apps they have on their phones and tablets. “As consumers want to whittle down the relationships they have, one of the challenges for banks is to stay really relevant and trying to use the appropriate channels to help them. Sometimes, that may not be the bank channel,” Joyce says.
The banks have to navigate a world where digital customer experiences are more seamless and the challenge for the banks is how they partner with other providers in delivering those experiences, either explicitly, as Westpac does with Westpac Live, or in the background. The New Payments Platform, which is scheduled to go live in the second half of 2017, presents similar challenges. How can banks differentiate themselves within the confines of an industry architecture and a lot of similar service levels? How can banks be different for their customers and offer something better than the bank down the road, Joyce asks.
Central to this is agility and Joyce says it’s a discussion that has gone all the way to board level. “Part of it is a mindset and part of it is a direction from the leadership. Definitely for me, agility is about being really clear on what you’re trying to achieve and removing processes that stop you doing that,” he says. The bank is focussing on small scale proofs of concept and testing and learning, whereas in the past some of these programs would have required “massive project submissions” to get underway.
"Part of it is a mindset and part of it is a direction from the leadership"
Along with drawing on its own internal resources, Westpac is also looking to outside partners and investments for new payments and fintech ideas. “We know that there’s so much change happening in the space that we need to make sure we’re accessing a lot of diverse minds about how we could do things differently,” says Joyce.
Westpac is investing $50 million in local technology ventures through its Reinventure
fund, including in peer-to-peer lender SocietyOne
and payments platform PromisePay
. It also holds hackathons in the hope that they will produce interesting new ways of solving customer problems.
“Fundamentally we believe payments are critical to our purpose as a bank and we’ve got longer-term investments in companies we think are going to be interested in the space as well as day-to-day activity enhancing our products,” Joyce says.
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