Collaborate to innovate: The journey to becoming digital first

“If the need for businesses to go digital was ever in question, the events of the past 12 months have decidedly ended the debate” in its favour, said Gaurang Shah, senior vice president for digital payments and Labs at Mastercard. In the past year, we’ve seen consumer adoption of digital payment technologies accelerate faster than we’d expected it would in half a decade. “In 2021, it’s more important than ever for companies to take a digital-first approach,” he continued.

Over two days from 23–24 February 2021, Mastercard brought together c-suite business leaders from telcos, fintechs and retailers in partnership with CNBC Arabia and CNBC Africa for Collaborate to Innovate — a virtual conference to explore the opportunity to transform the digital business landscape of the Middle East and Africa region and beyond.

Paul Stoddart, president of New Payment Platforms at Mastercard, joined John Hadden, CEO of Alshaya Group and Andre Hugo, CEO of Spot Money SA on a panel to discuss the journey to becoming digital first. The discussion, which was moderated by Shah, looked at designing a digital vision while anticipating the ever-evolving dynamics of customer expectations.

Hadden was the first to detail how the coronavirus pandemic had accelerated a digital shift. His company, Alshaya Group is a leading international franchise operator in MENA for nearly 90 of the world's most recognised brands, including Starbucks, Footlocker and Pottery Barn: “First and foremost, we expanded our e-commerce presence,” helping the brands that had operated primarily as brick and mortar stores to start selling online. Then, the group focused on enabling safe and simple digital payments. That meant integrating them seamlessly with the shopping experience.

Hugo represents a different aspect of the ecosystem. Spot Money is an open banking platform that consolidates payments and banking with a digital marketplace for financial services into a consumer-friendly app. “Our aim,” explained Hugo, “is to service the full spectrum of a consumer’s financial needs in a single customer-centric platform, giving them the choice to transact seamlessly and review tailor-made financial offers based on their unique needs.” The company takes a radically consumer-centric approach, which treats payments as an enabler of lifestyle experiences:

“We took a view not to think as a digital bank or as a solution provider. We put ourselves in the consumer's mind and in their shoes… We really wanted to understand what people are doing with their money and what outcome they're looking for.”

The panellists agreed the biggest opportunity to deliver these digital-first experiences is via smartphones. With significant and growing penetration of internet-enabled devices in even — and sometimes especially — the least developed markets, apps are fast becoming the most common means by which people access and engage with financial services.

Shah summarised this as a ‘super app’ proposition, then asked how Mastercard — as leaders in this space — are accelerating developments in digital first to make these consolidated consumer experiences possible.

“We very much take a similar approach being that one stop shop for our customers, being able to handle all of their payment needs,” explained Stoddart. That goes beyond just buying things to include non-discretionary payments such as paying bills or receiving wages and earnings. “We have to take a magnifying glass to each step within the payment process and look at how we can reduce friction and improve efficiencies.” Mastercard’s suite of real-time payment applications, which integrate seamlessly with a financial service provider’s app, enable all these use cases and more. Both infrastructure and rail-agnostic, they allow consumers to send and receive digital payments using a card, bank account or digital wallet.

But Stoddart challenged the idea that a ‘digital first’ future is a ‘digital only’ future: “We've got to remember that cash is the lifeblood for a lot of citizens around the world. So our efforts to reduce the reliance on cash should be done sensitively and ensuring that people aren't excluded from the financial world.”

Pivoting to consider how accelerating the conversion of data insights into creation of new value propositions, the panel discussed how new mechanisms and business models such as open banking can further improve the consumer’s digital experience.

Hugo detailed the Spot Money approach: When consumers first sign up, they ask for their consent to gather certain information to help provide them with personalised deals and recommendations: “’Based on your behaviour, the more you transact on our platform, we'll have a better view of you as a consumer. And then in our marketplace, we will present you with offers or solution providers in the financial services or digital products space that you can choose to engage with.’” The emphasis, he stresses, is on consumer empowerment: “In a way, the marketplace is a concierge for your digital products of the future.”

The same ‘marketplace’ approach is easily applied to ecommerce, too. As Hadden explains: “personalisation is key to everything in our mind in terms of the consumer experience.” And it’s not just about personalising the experience somebody has when they shop at one brand, nor indeed limited to online shopping experiences: “What's to stop the journey of personalisation from somebody shopping in a Mothercare store, going into Starbucks for a cup of coffee and then go to H&M to pick up some apparel?“

How do you bring those multiple ecosystems together? “From a digital and technology perspective, the idea here is to develop a common language that is used across different technologies and platforms and experiences,” suggests Stoddart. This standardisation enables safer and more accurate sharing of data generated from different sources. It also enables application of common data responsibility principles across global organisations.

We’re only at the beginning of the journey to understanding the true potential of data, but it’s essential from the outset to ensure sensitive information is stored and used responsibility. “As we look at the omni channel future, the ability to manage the data is going to be paramount,” says Hadden. “The importance of trust can't be underestimated,” concludes Stoddart, noting that its essential for consumer adoption.

Shah summarised three key takeaways from the session: the journey to digital first starts with mobile first; hyper-personalisation of services driven by data and insights is key, along with a trust framework around data; and we see a collaborative future where banks, fintechs and payment companies like Mastercard will partner to create a digitally inclusive ecosystem.

If you’re registered to attend Collaborate to innovate, stream the panel on-demand now