Payments International 2015 – Day 2 report #PayInt15

Today I was at Payments International 2015, which is one of the main annual industry events. Endava are the principal sponsors (that’s my disclaimer) – a colleague spoke at the event yesterday, and I’m speaking tomorrow. I was busy elsewhere yesterday, so today was my first day at the conference.

“Apple bites man”

The first keynote talk was from Ben Hammersley, the Editor-in-chief at Wired magazine, but he also does the speaking circuit and he made an interesting documentary about cybercrime earlier this year.

I made some crude notes of his keynote, Apple bites man below. Apologies for any spelling or grammatical errors:

Outside Context problems

Moores law: The speed of an iPhone is already 3 times more powerful than a Cray 2  supercomputer from the 1980s and will be considered lame in 3 years!

Metcalfe’s law: What was designed for networks (the usefulness of a network is proportional to the square of the number of nodes on a network) is now more applicable for social networks.

Global asymmetry

There is often a difference between the simple user experience and the complex back end that the  industry seasons sees. Traditional industries like banking look at a feature and think of the bank end’s complexity. New challengers and startups don’t see this complexity for a variety of reasons.

In the USA, Venmo has become very popular, and is a half social network – which ties in Metcalfe’s law nicely. If you work in banking, take a look at Venmo – you need to see it to believe it. I’ve used Venmo as an example of what people who have worked in banking for a while would disbelieve could exist.

Facebook’s announcement (of implementing person to person payments)

Accepting payments may lead to crowd finding and other uses for the money plus friendships.

Games companies have been employing economists for a while now because of the VALUE and SIZE of the cash pile of in game currencies.

The unbanked (people who don’t have a bank account) will choose their existing infrastructure providers, such as mobile phone operator and social networks for banking in the future

Device Intimacy

We do things via our mobile phone more than any other device. Nothing else follows us from the bathroom to the bedroom into the gym and the office.

And will become even more intimate via a watch.

External Insurgency Advantages

  1. Customer expectation of constant upgrades
  2. No existing reputation issues
  3. No technical debt (legacy systems)
  4. Faster, cheaper decision making
  5. More efficient tools
  6. [A strict] Minimum Viable Product up at launch
  7. Constantly iterative

This constant iteration and acceleration is new to the human race. We’ve never had anything similar before – e.g. swords didn’t suddenly get superseded by other swords every 3 years. (The closest example I could think of were cars, which are ‘updated’ every couple of years – but how many people really buy a new with each ‘release’?)

The law of what’s unique to a company should be kept internal, and everything else should be outsourced from commodity suppliers. The example was Netflix, which is hosted on Amazon Web Services, even though Amazon has a major streaming service of its own which Netflix competes with. When has this happened in corporate history, on such a large scale?

Conclusion

In the introduction to Ben, Chris Skinner described how traditional banks and payment systems are waiting for regulators to catch up with the new challengers – “they have it easy now, but as soon as they become established, the regulators will slow them down and become a level playing field”.

Ben argued against this and said that was equivalent to being chased down the High Street by a snail, and traditional incumbents can’t afford to take this attitude. They should start looking introspectively about reinventing themselves, re-tooling and creating smaller, high performance teams.

It was an inspiring speech, was exactly aligned to how we (at Endava) approach startups and large corporate customers, but like when we deliver this news, I don’t think anyone in the audience wanted to hear this from Ben.

During the audience questions, Ben was asked why the banks hadn’t responded to the new startups yet. He answered “The sunk law fallacy”. Having massive infrastructure, offices, work force and investments stops organisations from thinking differently. Ben talked about Metro Bank and its approach to branches. Metro asked itself “why do people want to visit bank branches?“, and then addressed those needs by opening before work hours; or perhaps when customers are walking their dog – so they offer water bowls and biscuits for dogs to ensure owners aren’t distracted by their pets; and during a lunch break – so they make sure their staff are available for a peak time. Basically, Metro Bank think like a startup – very customer centric rather than a traditional industry laggard.

Bitcoin

I went to two others sessions – both round table discussions, one on loyalty and the other on Bitcoin.

The loyalty one was really good – DunnHunby and RBS led that, and it was open and interesting. We covered a lot of angles on data ownership and marketing opinions.

The second session on Bitcoin wasn’t so great – the so called experts in the room clearly hadn’t used Bitcoin before because they were answering specific questions about the Blockchain “In my understanding”… yet if they’d actually used a Bitcoin wallet, they’d have known a lot more from personal experience. I left the session when I realised the experts in the room were talking from theory and I wasn’t going to learn anything.

In my session tomorrow I’ll be discussing a lot more about Bitcoin and other new technologies – I’ll go into my views in tomorrow’s post.

If you are at the event tomorrow, either contact me on Twitter or come over to the Endava stand and say hello. At the very least, we have some lovely sherbet lemons and phone chargers on the stand!

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