How to leverage disruptive innovation in effective payment transactions - TREAT P WORLD


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Wednesday, 4 October 2017

How to leverage disruptive innovation in effective payment transactions

By Tare Youdeowei

In today’s business world, especially in the technology industry, disruption is
one of the most over used words. From discussions involving Uber to industry
analysis of the rise of Netflix, the term disruption has become a recurring

However, as the word has taken on a life of its own, there are bound to be
misconceptions, the most common of which is the widespread confusion of
the word with innovation. While innovation is closely related to disruption,
they are not the same. While it is possible to be innovative without being
disruptive, it is very unlikely that one would be disruptive without innovating.
So what then is real disruption? What drives disruptive innovation and how
can it be leveraged in different sectors of the economy, especially in
facilitating seamless, secure and effective payment transactions?

To answer these questions, integrated digital payments and commerce
company, Interswitch Group, invited Brett King, who advised the Obama
administration on the future of banking and is described as the King of
Disruption, to speak at the debut edition of Interswitch Connect.

Financial ecosystem

With the theme, The Digital Transformation Imperative: Innovative Evolution
or Disruptive Innovation, Interswitch Connect brought together the digital
financial ecosystem, including leading innovators and Original Equipment
Manufacturers, OEMs, in financial services industry, to evaluate the future of

King, who is the CEO and Founder of Moven, a $200m mobile bank start-up,
with the world’s first smart bank account, gave three key takeaways on
disruption; thinking drives disruption, artificial intelligence and robotics will
drive disruption, as well as mobile and internet play major roles in innovation
and disruption.

On thinking, King said; “Thinking is focused on breaking a situation down into
its fundamental pieces and then putting them back together in a more
effective way that serves purposes. True disruption occurs when one tackles
a challenge from scratch. If we were to do things differently from scratch,
what would it look like? I believe that breaking down a complex situation into
its simplest and most basic form, and creating new solutions from scratch, is
key to disruption.”

For driving disruption with robotics and artificial intelligence, King suggested;
“With the advent of smart factories and smart infrastructure, manufacturing
will no longer be dominated by human beings. In healthcare, the emergence
of real-time diagnosis and gene editing technologies will further disrupt the
industry. New technologies like artificial intelligence (AI) and robotic process
automation will also turn the banking ecosystem on its head, disrupting the
way people bank and the manner in which institutions deliver financial

“Hence, banks of the future will largely depend on these technologies to
thrive, as they can potentially increase efficiency, decrease costs and enhance
customer experience. They will radically disrupt banking as we know it and
financial institutions that refuse to adopt AI and robotics on time will be left

Stating that some of the biggest disruptions across different industries have
been tied to the growing internet and mobile penetration, King noted; “Mobile
technology has created enormous value for people in Africa enabling them to
do things that would have seemed impossible before now. For instance, the
smart phone has impacted different industries including media and banking.
With mobile penetration across Africa standing at over 90 percent, the reach
of financial services has expanded to consumers even in very remote areas. A
clear example of the disruptive potential of mobile technology is the M-Pesa
mobile payment service in Kenya, which constitutes more than a third of all
financial transactions in Kenya.

“Invariably, the growing internet and mobile penetration in Africa will foster
greater financial inclusion and coverage of the unbanked, just as it would
continue to disrupt other sectors of the economy.”

King whose focus is on how technology disrupts businesses, changes
behaviour and influences society, lamented that lack of thinking in banking
and financial services industry has left the sector still playing catch-up but
stakeholders need to know that the Disruptive Innovation Model has come to
stay. “I implore stakeholders to think of banking as an experience and not
just a collection of products. To achieve this, banks have to become data
companies as you will only be as good as the data you have and can
effectively use in creating such customer experiences.

“For real disruption to occur in the financial services sector, bank products
and services need to be redesigned. For the automated world and to achieve
this, banks need to partner with a fintech company, acquire a fintech
company or copy and replicate the technology itself. Of the three options,
partnering fintech companies remains the best approach.”

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