Episode Five: The Evolution of the Payments Industry

The Industry Is Evolving at a Rapid Pace of Change.

In this episode, we are joined by Bruce Lowthers, President of Banking Solutions at FIS. Speaking at the P20 Conference in London, Bruce talks about the rapid evolution of the payments industry, the modernisation of banking platforms and cyber security.

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The Power of Data Podcast

Episode 5: The Evolution of the Payments Industry

Guest: Bruce Lowthers, President – Banking Solutions FIS
Interviewer: Sam Tidswell-Norrish, International CMO Dun & Bradstreet

Sam 00:00
Hi there. Welcome back to the power of data podcast series. I am joined today by a friend, a mentor and someone I've had a huge amount of respect for a long time in this industry. Bruce Lowthers. Welcome.

Bruce 00:12
Thank you, Sam. It's great to be with you. Excited to be here in London too, back for the P 20 Conference and a return trip from our inaugural start a couple years back.

Sam 00:22
Yeah. So we've come a long way. In fact, I think about when we started the P20 with a random funny group of people and an idea to bring what two major cities in in a major industry together and how it spawned from there and we started at Lancaster House. We went to Atlanta, back here now. How have you seen the organization grow?

Bruce 00:39
Yeah, it's really been a remarkable journey. I think when we thought back to the beginnings and, coming out of Atlanta with an idea, and approaching some of our friends here in the UK of this new organization. It's been awesome to see it kind of take hold and really blossom over the last couple years. And to your point, it was very primary in the beginning and has moved on to the level of conversation that we had in the board meeting yesterday, was very highly engaged very deep in discussion. So really fun to watch just the energy around the group has really taken it to a whole another place. And then to be here today to come back, having the board meeting back at Lancaster was fun. But coming here to Church House is really been a spectacular venue for us, max capacity for us. It's a big turnout, the changes from just three years ago to today, we were basically begging people to come to the first show. And now we're in a position where it's still invite only, and people are calling Duncan and asking to come to the show. And he's having to tell him sorry, we've already capped out there's not any more room to attend. So that's really a huge transformation for the organization

Sam 01:57
And there's no better way to create more demand than by telling people that can’t have something they want.

Bruce 02:02
You know, it'll be interesting to see as John Hutton, our new chairman comes forward, where it goes from here. Certainly, we've built some momentum. We've done some really cool things in a short time period. And now seeing the new board members join, seeing John take the Chairman role, and with Duncan, leading as executive director, I think we're really positioned well to have a significant impact, positive impact on our ecosystem in the payments world.

Sam 02:29
The P 20, billed as the Davos of payments, has had an incredible start, thanks to your leadership, you're now handing that baton over to John Hutton, who's an Executive Member of Nationwide. Let's talk about what you're doing today. The day job, the real job, and it is a big one. You lead the banking solutions division at FIS, and you're on the ExCo there. There's a lot to do I imagine, do you want to tell our listeners a little bit about your role at FIS?

Bruce 02:56
Sure. Just recently, I think many people know we closed on the Worldpay acquisition. And as part of that we reorganized FIS into three segments, our banking solutions segment, our merchant solutions segment and our capital market segment. The banking solutions, if you look at that is really our legacy FIS world. So, it's our core banking solutions, our lending solutions and our payments. Obviously payments is the biggest block of our revenue stream that we have. And something that we've really made a big impact globally with. We've got business in over 100 countries in our group. We've got over 34,000 employees on a global basis, all driving what I believe to be kind of the future of payments. And we also are delivering that same modernization effort around wealth and around core banking. So it's an exciting time for the Banking Solutions Group. But we're equally excited about what Worldpay is brought to us. We spend a lot of time on modernization of our platforms in the banking solution. But as part of the Worldpay acquisition, we also picked up a modern platform on the acquiring side. And so really bringing those two together, create a great opportunity for us to build out this community, if you will, between our bank customers, and our acquiring customers, our merchants and corporate clients. So very excited about the opportunities in front of FIS and in certainly my own segment of banking solutions.

Sam 04:31
Thank you. You talk about Worldpay. Worldpay is a British brand originally, something we've been very proud of. And it's been through an incredible journey. You know, from the carve out at RBS to the private equity investment, its IPO, its Vantiv merger, and then FIS and I think FIS really is a perfect example of the stature of will pay for it to be considered a part of an industry great like FIS is amazing. One of the constants through that Worldpay journey has been a man called Ron Kalifa, who's been a great mentor of mine and someone I have enormous respect and admiration for. Now, Ron always talks about evolving businesses. And he's a real visionary. How do you think that business is going to evolve within FIS and how do you think data and analytics plays a role in that growth?

Bruce 05:18
I absolutely agree with Ron and I've had the opportunity to know Ron for a while as well and a great guy. From our perspective, it was important for us to kind of build out our portfolio. And really, when we looked at that, being generally considered FIS is the FinTech number one, we really wanted a comparable asset to map off to, and Worldpay was that acid test for us, and so we aggressively pursued that. We do believe that that is about the evolution of where the industry is going to. You see more and more of these ecosystems being built out and it creates tremendous amount of opportunity to deliver solutions that kind of improve people's lives. And so things that we'll look at are things like our loyalty solution that started out of our issuing business on the banking solution side. But it also crosses over to the acquiring side and allows for loyalty points to be used as a digital currency at the point of sale. And so now you're really seeing this harmony of the two sides of the equation, issuing and acquiring, coming to bear, you're going to see more and more of those things, whether it be through things that we've done in the past in Brazil, for example, or we do lending at the point of sale, you'll see the ability to have that distribution from the Worldpay assets married up with the processing and network capabilities of FIS, and the issuing components. Those things really create tremendous opportunities to evolve our industry forward. And I think at the end of the day, what our goal is, is really to make this great experience for our customers. This is one of the cornerstones to that new foundation or the evolving industry that is moving at a pace that we've never seen before. But it sure is fun.

Sam 07:10
It's really interesting to hear you say that, and I hadn't even thought about some of the cross pollination and synergistic opportunities from a solutions perspective, creating that end to end value chain, that well, no-one really has. That's awesome. So let's continue to talk a bit about payments were at the P20. And it's obviously a hot topic. Where do you think the challenges and opportunities are? And I say that because there's so much innovation happening in this space as the Internet of Things comes online and machine to machine payments kick in where your fridge talks to car tours to your bank? The volumes are going through the roof, it's creating new models, new commercial models. What do you think the challenges and opportunities are in this new world that we're entering?

Bruce 07:50
Yeah, so payments really is evolving very rapidly and like anything when there's change, there are great opportunities. The challenges are managing that change, right? So doing things in the right, responsible way. And I think that's where P 20 is really important. For me, P 20 was about the industry itself kind of stepping forward and helping lead through the tremendous change that's happening, the technology and candidly, all of the participants of P 20 are driving. But there's also a responsibility to do it in the right way. And so for us, when I look at P 20, I think that's really the cornerstone of what P 20 was about was helping us manage and guide, but we really need to do it on our own. Our industry needs to step forward and help manage that change. And excited to see that it's resonated with my counterparts from the other companies and their willingness to step in and say yes, we need to think through how things are going to play out from a regulatory standpoint. Are there ways to make regulation more efficient? How do we deal with the changing complexities of cyber security. And so it's been a fantastic platform for us to kind of lead the industry in. And actually, you know, as you well know, last year was the first time from an industry perspective where we came together as a group, and tried to solve, have our first cyber games and really come together and collaborate on how we were going to solve a massive cyber-attack on the ecosystem itself. So, I think we're really excited about what the opportunities are. And the challenges are really about us managing the change on behalf of the industry as best we can, or give guidance to the industry as to what we think are responsible growth path forward.

Sam 09:43
I remember the cyber games really well. It was like something out of a movie. It was amazing with the control center. Yeah, with different scenarios, and War Gaming. It was very, very cool. Ultimately, what underpins a lot of this stuff is governance, infrastructure, and data. Those are three areas that are very easy to say. Very hard to do in practice, and it takes organizations, a lot of manpower, a lot of time to get them right and to make sure that they're ready for any kind of attack, because you don't know where it's going to come from. How do you guys approach that at FIS?

Bruce 10:13
I would say a couple things. I would agree that so all of those things come together. The first thing is just getting people in a room to talk about them. Right. I think even here at P 20. At the board meeting, what was interesting to watch yesterday was having some of the lead regulators at the table, talking to the business leaders on the practicalities of some of the regulation that's in place, and what they're willing to move on, in order to create a more efficient system. And I would say just three years ago, those conversations wouldn't even occur. But because we keep at it, and we keep pushing on, let's get in the room and talk through the dialogue. How do we make it better, the goal is simply to make it better. I think that's really been the focal point of it is get people in a room so that they understand the issues better. They understand the practicality of how things will be deployed, and the impact on the end user. And if you have people in a room that are educated on how it all works, you're going to come up with a better answer. And that's really all we're trying to do is, with P 20, is to drive that. I think from an FIS perspective, like probably every major company, it's absolutely a focused on cyber regulatory, where, you know, in essence, a regulated entity, because of our size, we take that stuff very, very seriously. We wake up, we eat, breathe cyber, and I think it's just a change in the environment. You talk about evolution of an industry, you go back 10 years ago, where we are as a company, FIS today from a cyber and regulatory risk management perspective, we're dramatically further along than we were a decade ago, and we have some great people in our organization that lead that for us. Greg Montana, done a phenomenal job for FIS, is leading our risk and really is developed a world class risk organization. And in today's environment, it's table stakes for you to be in the space. And so it's something that we focus on quite a bit.

Sam 12:19
Talking about the pace of change and how much companies have had to evolve and how quickly, I mean that adaptability, I think, is a sign of a great company in the first place. Anthony Jabbour CEO of Dun & Bradstreet in a previous podcast, spoke about the pace of change. And that rate is exponential. But IDC did a study that I think said between the years 2015 and 2020, there's going to be 50 times more data produced by the end of each year than before. When you compound that that is a terrifying rate of change. And it comes down to all the different alternate data sources that are just producing data points and information all the time that we’re recording. What that does is create a phenomenal opportunity that we've all seen sci fi movies, I like sci fi movies a lot, and this is one of the fun questions, don’t think about it too seriously, but if you had to fast forward 10 years, where do you think some of the biggest opportunities are going to be for business? What do you think some of the biggest businesses are going to be? I mean, every 10 years, there's a new, it was the oil firms, then it was the banks now as the technology firms, what does 10 years time look like?

Bruce 13:26
A great question. I wish I knew what it was going to look like. But what I do know is it's going to be fun. Whenever you have this much changed and the opportunity for change. There are people that like change, and there are people who will resist change. And I've always been one that is enjoyed the change and look for the opportunity to move forward. I like the idea of creation of product. I like the idea of trying to help people and I think those attributes still will be relevant as you go forward. What you'll see though, clearly, his product will iterate faster. It'll be customized will be more personal in nature, the underlying component of that will be data. Data is in, you're already seeing it, the data is exploding, hyper connectivity is emerging everywhere, there's going to be more and more data points for you to drive through and take out trends or personalized transactions, again, with the underlying theme of making your life better, easier, more convenient. And so I think you'll see that trend really accelerate over the next decade, you'll see more and more companies evolving to data or information technology companies, as they capture more and more data from these connections that are emerging across the world. It's really fun to see projects out there that are incorporating this physical and digital overlay to your daily life. So when you're walking down the street, you're feeding off all these connection points and the things around you are changing based on you, and the data attributable to you, I think it's going to be an interesting thing to watch, evolve. So hopefully when my son is of age and he's driving through his first jobs, he's got the opportunity to, to take that and do something cool with it. I’ll be hopefully retired at the beach by then.

Sam 15:21
I love hearing executives talk about change. In that way, I realized that my favorite Henry Ford quote, “If you always do what you've always done, you'll always get what you've always got.” And I think to constantly keep trying to evolve it to try and remove the friction, to think about the person you're addressing the needs that you're trying to solve that personalization is really exciting. And I think necessary more than ever in financial services. Bruce, you've had a very entrepreneurial past as well. It's not something we touched on a great deal. But our listeners, as you know, a very varied bunch, but there's a lot of people out there that have similar aspirations, what would you tell a young entrepreneur, what advice would you give them in our space?

Bruce 15:59
You know, for me I've been part of four startups and I guess two more startups that are associations with ATPC and P 20. So I guess six startups overall in my career, you know, what I would just say is, it's really important to be passionate about whatever you're undertaking. I started with the idea of, how do I solve a problem for this customer? I really just went out to them, ask them what it was that they were struggling with. And then I tried to think through, how can I help them solve that problem? That models worked pretty well, for me, staying focused on the client staying focused on how I'm going to help them improve whatever the problem was that we were trying to solve at the time and being absolutely passionate about driving it forward. There's lots of people as you're starting up companies that will say no, or they will be doubters or they will give you 1000 other things that it could do. And it's important to stay focused and passionate around delivering the solution that you have. What I would say, in hindsight, is you really have to enjoy the journey. You know, now it's funny to be the older statesman, versus the young entrepreneur that was coming up. What I would say I've enjoyed the most, has been the people that I've worked with over the years and getting the opportunity to see ideas come to fruition. People, expanding their careers, going off and starting their own companies from the ones that we started. And just getting to watch all the hard times and the good times have been very, very fortunate. It's been a great journey for me personally, and I'm just grateful for everybody that's been on the team for a long time. We keep together a long time to which is nice.

Sam 17:57
I've noticed I've got lots of colleagues at Motive Partners who know a lot of the FIS team and a lot of the Dun & Bradstreet team and the Black Knight team and even the Pfizer of the First Data and the Worldpay teams. It's, it's a big family. And yeah, Anthony said something very interesting, he said, it's not just what you do, but how you do it. And I think the peers that, including yourself, you spend your time with are a great, great nod to that mantra. I also think that one of the things you just called out, there's a really important one to highlight again, which is you need to be focused on your corporate objectives, but then also invest your personal time wisely to achieve those. That's not something that's easy to do and the pace of life that we live in today.

Bruce 18:40
It really isn't. It's interesting as I've gotten older, and you become more aware of the limits of time, and I think in the early days for myself, like everyone who's young, they have endless amounts of time, you know, obviously as many people know, I had an illness that kind of brought a sense of urgency. To kind of what I was doing and the realization that time wasn't endless, and so it brings maybe another gear to kick into. And so you just start seeing how do I consume more data? How do I make better decisions? How do we get access to more things? How do I experience more things? So it really helps drive myself and ultimately, our company forward is really now the passion of learning, and how do you really absorb as much as you can to make the opportunities as great as they can be for our team.

Sam 19:35
There's a few things I want to touch on there. And it's a great way I think, for us to close out. Firstly, for those listening, because this is obviously a podcast recording, we've referenced how old you are three times I got to tell the listeners it's really not that old at all. You’re selling yourself short there, I’m afraid. And then secondly, using your time efficiently and being efficient, both as a person and as a business. You're right data and analytics is the way to do that. And I think that is the power of data to go to the title of our podcast. You know, how do you grow revenues? How do you mitigate and manage risk? How do you reduce cost? And how do you keep being the best that you can possibly be with what you know, this data and analytics? You're absolutely right. Bruce, thank you so much for joining us. It is such a pleasure as always, and thank you for a great few days.

Bruce 20:23
Thank you and congratulations.

Sam 20:25
Thank you.