Tell us a little bit about yourself.
I’ve been with MasterCard since 2001, and I am currently heading MasterCard Advisors, the professional services arm of the company, in the Asia Pacific region. The most exciting aspect of my job is to witness and be a part of the growth of our data and analytics business.
We’ve been doing – and more importantly, applying – Big Data long before anyone called it that way. We discovered early on that spending data – even when completely stripped of all personal information, which, by design, MasterCard does not collect, need or want – can be invaluable for a multitude of reasons. It helps us better understand consumer behaviour, target marketing programs, design better-fitting products, make smarter risk decisions and much more. You don’t have to be a techie or data jock to love data.
You have extensive experience in customer acquisition. Can you tell us the most important ingredient of a successful customer acquisition strategy?
With the shift towards digital, consumers are bombarded with competing messages. Businesses have to truly understand their customers to pinpoint how to cut through the clutter and convert customers. More than just mining more data, businesses need the right, smart data that answers their questions and provides actionable insights.
MasterCard Advisors offers unparalleled insight into the retail spending trends, drawing from 43 billion anonymized and aggregated transactions processed each year. We pair this with rigorous data science, reinforced by strict data privacy and confidentiality policies, to turn big data into smart data for our customers.
Many businesses have a solid understanding of their customers’ spend habits, but they don’t have the line of sight into broader marketplace trends. For example – who are their most valuable customers? What experiences are they seeking? What do they do before and after they shop? What is our share of wallet? We have that knowledge, and we put that to work for companies of all sizes to help them attract and retain customers, and deliver better marketing campaigns to reach the right customers at the right time with the right content.
How do you think financial institutions can understand their customers better, and become a part of their customers’ lives?
With many customers forging life-long relationships that can involve cards, mortgages, checking and other accounts, financial institutions are in a unique position to truly get to know their customers’ needs, wants and desires. There are so many incredible opportunities across a customer’s lifecycle to create enhanced experiences that deliver real value to deepen the relationship.
Additionally, financial institutions can benefit greatly from understanding how their customer segments engage across the marketplace. By building robust customer segmentations, we help our clients understand their customers better, so they can devise strategies that will drive their businesses.
Today, we see an increasing demand for mobile and digital capabilities. How are the expectations of MasterCard’s customers changing, and how is MasterCard planning to meet these expectations?
As we transition into an increasingly digitally connected lifestyle, the payments industry will see even greater demand for simple, convenient and secure solutions. The team at MasterCard are continuously working with our partners in the payments ecosystem to meet these growing demands for mobile and digital capabilities, and to deliver innovative, scalable solutions to our customers.
A good example is MasterPass, which was launched in early 2013. Since then, it has been rolled out to 27 markets around the world. It is our digital payments platform that enables consumers to store all their card, shipping and billing information in one place for a simpler, safer and more convenient checkout experience when shopping online or on their mobile device. MasterPass is now available to over 40 million consumers in the Asia Pacific alone, and this growth is expected to continue.
Looking forward, the unprecedented convergence of the physical and the digital world presents new challenges. Just as consumers have embraced more secure and convenient ways to make payments; criminals are also adapting, using increasingly advanced technology to commit cybercrime and fraud.
There is no one solution to deal with cybercrime, and it needs a multifaceted approach to combat it as best as we can. In our view, collaboration is the key – a universal commitment between financial institutions, retailers, payment networks, governments as well as greater vigilance among consumers themselves, is required.
Collaboration is MasterCard’s motivation behind our annual Global Risk Leadership Conference, which was recently hosted in Singapore, where we bring together customers, merchants, issuers, banks, and legislators to share best practice, ideas, and have robust discussions on how to continue our fight in the battle against fraud and cybercrime.
In what ways do you see big data (potentially) making an impact on traditional payments & card companies?
MasterCard is committed to expanding our services portfolio, delivering deeper insights and broader capabilities to help our clients grow their businesses. Having the right data is a critical part of how we evolve our business. Being in a position to help clients make smart, sound decisions based on MasterCard Advisors insights is incredible. And yet it’s astounding to see how many people still fly blind when it comes to making decisions that should be based on solid data.
It was a challenge to make people see the value when the concept of Big Data emerged. That has since come to pass. What matters now is making it clear to customers that not all Big Data delivers value. All data is not created equal. You can have the best data in the world but without smart people and precise, proven analytics, what you end up deciding to do with that data may fall flat. And vice versa. You need both, and we as an industry need to do a better job of educating people about what that truly means.
Be it payments, funds transfer or even credit scoring, banking is being unbundled by FinTech players. How do you think banking can respond?
Most consumers are looking for convenience, security and value. While some FinTech players have identified and delivered innovative solutions that consumers use today, banks still play a unique and integral role in money management. They ultimately ‘own’ customer deposit and lending relationships, and consumer surveys have shown time and again that people trust their banks more than anyone with their money.
Also, consumers are increasingly going mobile, especially in Asia with India joining China as the only two countries in the world to have over 1 billion smartphone users.
However, at the same time, banks also have a reputation for being slower to adapt when it comes to innovation, and also bogged down in regulation that is often there to keep our money safe in the first place. So the banks need to get past their historical penchant for building everything themselves and instead embrace the explosion of experimentation and innovation that the FinTech players breed including payments, micro-lending, risk management and marketing. These provide opportunities for partnerships and acquisitions that can help the banks innovate faster and stay competitive.
By working with more players and developing in-house technologies, banks can combine the newer services that consumers have found compelling with their existing offerings to develop an even more robust offering in the future.
Given the digital wave, how is the merchant network evolving? What role, if any, do you see the merchant networks playing, to strengthen a bank’s proposition?
If we go back to the beginning of card payments, MasterCard has connected millions of consumers and their banks with millions of merchants and their banks – without any of them necessarily having any direct relationship with one another. The merchant doesn’t have to vet the customer’s creditworthiness nor is the merchant’s sale dependent on how much cash the customer has in her wallet. We are there to make the payment simple, convenient and safe for both parties. You don’t hear a lot of people or merchants complain about how complicated, or inconvenient card payments are. The days of long checkout processes are far behind us, and we are now seeing people pay with their cards – often tapping rather than swiping or dipping – and speeding through the checkout process.
Digital is changing the form factor, but the goal remains the same: a singular focus on making it even safer and simpler. What was a plastic card representing a bank account will increasingly be a mobile wallet or a virtual card number within an app, such that payment is a tap away on our mobile devices.
With our state-of-the-art tokenization technology, MasterCard is at the cutting edge of all of this, encrypting cardholder’s actual card number behind the scenes for every single digital transaction into a one-time use number, called a ‘token’. Even in the unlikely situation of a merchant data breach, this token would be rendered useless as it is insufficient to complete the transaction.
And if that doesn’t already provide consumers with enough cause for peace of mind, if cardholders notice the unauthorized use of their MasterCard card, they are protected from the cost of the unauthorized transaction as long as they have taken reasonable steps to protect themselves from fraud.
What is the biggest change we are going to see in the financial services industry in the next 5 years?
Throughout history, the middle and affluent classes have enjoyed easy access to financial services. However, on the other end of the spectrum, the majority of less affluent populations have kept their life savings under a mattress or worn on their bodies. Just as they pay a premium for buying basic staples in small quantities, they pay a premium for lack of access to conventional financial services. This leaves them susceptible to theft, punitively high fees, and extortion.
On a recent trip to Myanmar, I listened to villagers sharing about having money transmitted to them from relatives working in Yangon or abroad through multiple middlemen all taking big cuts. But two big trends are changing that. One is the simple fact that the banked middle class is growing very quickly – especially in Asia and Africa. At the same time, technology is making financial services increasingly accessible to the poor. Mobile phones, e-commerce, and electronic payments play a big part of that, and MasterCard’s right in the center of it.
For example, we have partnered with the Unique Identification Authority of India (UIDAI) to develop biometric authentication services for the Aadhaar program, the largest biometric identity program in the world and the cornerstone for achieving financial inclusion in India. Since its launch seven years ago, Aadhaar has enrolled over 900 million Indians.
That’s just one step on our journey to our stated goal of making financial services available to 500 million more people by 2020. Doing well and doing good need not be mutually exclusive, and if we create the right model for the new equation, we can bring those left behind into the formal economy.