TSYS Innovator Chris Colson

Transcription

1 TSYS Innovator Chris Colson Hi, it s Karen Webster for PYMNTS.com and I m here today with Chris Colson, who is the new director of innovation for TSYS. Welcome, Chris. Good morning, Karen, how are you? Doing great, thank you. Well, I was anxious to catch up with you to get a little bit of background on you, and then specifically, what director of innovation for TSYS is all about. So, why don t we start off by giving us a little bit of your background, and then what you re planning to do with TSYS? Sure. So my background has primarily been focused in the banking industry, with a twist of innovation sprinkled throughout. So obviously, years ago, director of innovation in a role like that didn t really exist. And throughout my career, I ve always looked at products and channels and thought about ways to make solutions more available. Instead of just through one channel, like the web, like wouldn t it be neat to make that available at the ATM or through IVR, or now, on a smart phone. So throughout my career, having that kind of experience kind of led 1

2 me to migrate toward a position such as director of innovation. And in my last job, my role actually was an innovation champion, which is also kind of a new title in the industry, and I was primarily responsible for putting together a program as well as shepherding ideas through that program that would ultimately lead to revenue and generate growth for that company. And so TSYS had seen some of the work that I was doing and was pretty aware of we were working on in the industry and opened a position entitled director of innovation, and they asked me if I was interested, and it was yes, so I could take on that challenge of how do you look at PYMNTS and then how can you apply innovation to them that would both benefit TSYS as a whole as well as their clients, customers, and employees but then society as well. Well, that sounds great, and I d love to learn a little bit more about the societal aspect of innovation, but let s set that aside for just a couple of minutes. I want to dig a little deeper into a concept that I know is very special to TSYS and really, I think, is at the center of a lot of the innovation agenda that it has, and that s the concept of people-centered payments. Give us a sense of what means for TSYS and how your role will bring that to life for TSYS and its customers. 2

3 Sure. So the concept of people-centered payments is just that the name implies, is that if you look at the payment, take out the processing out of it, which is something we re well renowned for in the industry, and let s look at the payment from the beginning of time. So, the use case would be from the time you wake up to the time that you go to bed, how does that consumer or that business interact with the payment flow? So instead of focusing on how do you make the processing of the payment faster, better, cheaper, how else can we get involved and innovate to make that payment process through -- no, I need to start over. Do you want me to ask the question again? No, I m good, that s OK. So people-centered payments is a buzz word here at TSYS, one that we take to heart, and we re looking at not only the processing aspect of the payment, itself, now, but also the entire use case. And what I mean by that is instead of just being focused on how is that payment processed in a secure manner, etc., between the purchaser and the acquirer, and the merchant, etc., to what are the other opportunities within that payment process where we can play a role. So think about it as somebody wakes up in the morning and they decide to go to their favorite coffee shop and buy a coffee and donut. Besides processing that transaction, what are the other ways 3

4 that we can put that person, again, in the center of that payment process and think about how we can alleviate, maybe, some pain points and some frustration that they may be facing. So a good example would be when they enter into their coffee shop, they have a prepaid card already stored on a smart phone and they make their order wirelessly before they get to the shop, and when they get there, they can not only pay but they are also maybe recognized, there s some kind of facial recognition, etc., and they can just pick their coffee up off the counter and leave. So the people-centered payments now for us, the use case is from the beginning, when they first start to think about that object that they re going to buy, what motivates them to buy, what are the opportunities from a marketing perspective, all the way through on the back end after they make that purchase, should we be doing things like providing that information to the warrantee, so that if they ever have a problem and they call the manufacturer, they already know who that person is because of the purchase that they made. So people-centered payments to us is that entire use case of the payment process, itself. So it really does support the omnichannel concept that you talked about earlier, where it really just isn t about how people 4

5 interact with a particular channel, but really how the entire spectrum of channels and endpoints that people encounter throughout their day-to-day life really does impact PYMNTS. It sounds like that s really what people-centered payments is all about. Yes. So we don t want to put any limitations, if you would, on how a person wants to transact, and again, it could be the person making the purchase or it could be the merchant, themselves. Themselves. The game is you want to provide as many solutions as you can so that people become accustomed to buying and paying for things and settling in a way that s most applicable not only to their particular model, but also ease of use. Got it. One of the other things I noted in getting prepared for this interview was a comment that you made about the difference between incremental and disruptive innovation. What do you mean when you use those two terms, and what is your philosophy on innovation? Should it be incremental, or disruptive, or both? Yeah, and the answer is that it should be both of those. So, good examples and the way to explain the difference is incremental. So, think of the pencil, and I believe it was invented 5

6 some time about 1565 by some English shepherds. They used to use ink to mark their sheep. Well one day, they came across -- they called it black lead, and they were using that to mark their sheep. So for years, it really didn t change. But when you used it, it was a oily substance, etc. So about 100 years later or so, somebody, a cabinet maker actually looked at that and said, hey, if I put two pieces of wood around this thing, then I can hold this sticky substance and it will no longer get on my fingers. And so to me, that is a good example of incremental, where you have something and then it evolves over time. So, if you continue with the pencil example, I think it was in the 1839 timeframe, somebody else took that concept of OK, now we have it in between two pieces of wood, what else can we do with it? Well, one of the problems with it was when you set the pencil down, it would roll away from you. So that next person took that incremental innovation and made it six-sided. Well, then it couldn t roll away from you. Then later on, somebody decided to put an eraser on it. So it s kind of incremental. You can think of it as extending the lifeline, if you would, of a product or solution. And another good example is water. When you go into the store and you buy water, it costs more than a gallon of gasoline, which is really interesting to me. But if you think about 6

7 bottled water, they took the same water, they put it through a double filtration process, and then they put it back into the bottle, and then they marketed it. So, they took something, again, water, a basic thing; did some double filtration, that s the incremental piece; and then they marketed it. So those are really good examples of what incremental is. And another good additive that I like to refer to is, think about, and I believe it was Ralph Waldo Emerson who coined the phrase, Build a better mouse trap and the world will come to your door. Right? And so think about that. He didn t say build a newer mouse trap or a different, he just said better. So when you think about it in those terms, that clearly defines what incremental innovation is. So disruptive is something that a lot of companies need to focus on, depending on their industry, and what that is, that takes something that the normal person can t afford, it isn t accessible, etc., and they make it affordable and accessible. So the primary example there would be the mainframe computer. It started out, cost millions of dollars. Then it went to kind of a mini-mainframe, still a little out of range for a majority of people. Then we had the desktop, the laptop, the tablet, and the smart phone. So what happened during that evolution? 7

8 Through disruptive innovation, it became more accessible and cheaper for the masses. And so another good example would be, look at game stations or game programs. When the PS3 came out, it was innovative in that for the first time, a game station actually included a DVD movie player. To me, that s incremental, right, took something existing and you added something to it. Then, look at what the Nintendo Wii did. They took a gaming system, they added the wee controller that measures the motion, and they actually made it more affordable for people that weren t normally gamers to want to buy that product. And the example would be tennis. So, if you re a tennis player, most likely you weren t going to buy a PS3 machine because you didn t know how to work the controller. Wee looked at what that problem was, or where that conflict was, or sense of frustration, and most people couldn t afford the technology, right, to hold something in your hand, wave it around, and have a screen read it, so Nintendo actually took that device, made it cheap enough, put it into the controller, and you look at the people that buy Wee, the age ranges from, you know, little children to elderly, now, so that s another good example of disruptive innovation. 8

9 What I think is interesting about listening to your explanation of both is that sometimes, people think that the best innovation is disruptive when in fact, incremental innovation can be just as beneficial, and certainly just as important in moving an industry forward. Would you agree with that? Absolutely, and I m not saying that one is necessarily easier than the other either, by any means. But your point about the incremental, yes. So innovation can not only mean a new product or service, but improving on a method or a process. And to your point about that, people look at something that s already been developed and then they just want to enhance it, again, because they had some kind of frustration or some kind of need. And a real good example would be in the medical field with incremental. Doctors use different tools. Well, their hands are different. They need a tool that s longer or more narrow, etc., so absolutely, both are just as important, but I would say disruptive is probably a little more difficult to come up with because the other just extends the line, yes. And I think, you know, the lesson for innovators is, it doesn t always have to be disruptive to be powerful, that a lot of times, the most effective innovation is looking at what people are doing today and improving it at the margin so that to them, it s very 9

10 beneficial and even disruptive, but the level of innovation, the level of effort required isn t what it is to make something from scratch and new, which I think a lot of innovators feel that they must do, especially in PYMNTS. Yes, and that s kind of a misnomer, if you would, because you can debate all day long, well was the innovation incremental, disruptive, and then, you know, you really can t win that. But what s unique about innovation is it doesn t always have to come from inside your company. Someone can take your product, give you a suggestion, and then you can enhance it that way, exactly. So let s talk a little bit about what you mentioned at the beginning of our conversation, which is innovation and improving society. So, I sense that your philosophy about innovation isn t just about saving money or improving process, but really looking at societal improvements. Help me understand how that fits with what you re going to be doing for TSYS in your role. Sure. So if you go back to people-centered payments, let s say I do a lot of international traveling. If I were to take my smart phone from a cell phone provider in the US that may be locked, and then when I get over to, say Europe, I can t use it. So, when 10

11 we look at innovation at TSYS, and again with people-centered payments, how do people live? That s the societal part that I m talking about there. Don t limit yourself to just saying, we need to make this cheaper, or we want to make more money, because yes, you can do that. But the real success comes in when other people look at what that innovation is and they start talking about it with other people. And ultimately, you do want it to impact society. So a good example is, if you travel abroad and before you leave, you forget to call your bank and say, by the way, I m going to be in London next week, so if you start seeing transactions coming across, they re OK because I m telling you, beforehand, I m there. As opposed to, something beneficial might be, when I land and I turn on my phone and it realizes that the network I m on is in London, it then can send an alert or message to my bank that says, hey, Chris is now in London, so his card is going to be used. And the technology there would be like geolocation. To me, that benefits society, because then I don t have to worry about getting a call from my bank saying, we think there s some inappropriate activity on your card, or it saves me from the embarrassment when I go to pay for dinner or buy that souvenir and I get denied because I didn t call the 11

12 bank. It just makes everybody s life easier, and that s what a lot of innovation is about, well, how do you make it easier to live every day, and eliminate those things that make you crazy. Sign me up because I never remember to call the bank. That in and of itself sounds like an awesome innovation and very useful. And I think a lot of times, too, when companies talk about innovation from the executive level down, and even sometimes from the street, they want to know, how much money are you going to generate from this program because there is expense associated with it? And again, that is absolutely some of the objectives as part of an innovation program, but just as important is to be able to go back and say, hey, you know what, there was this problem, we were able to solve it, and by the way, the impact to this group, or society as a whole, has really benefited us because people now look at us in a different light. I think that s absolutely right. That is the kind of thing that delivers a great experience to people, and people remember that and they become incredibly loyal because they re very grateful for something very small that was done to really make their life easier. So, I think it s an excellent point and a good philosophy, too. 12

13 And the other thing I like about it is once you start to have a track record of that, you ll have your clients, your customers, etc., that will then start responding and giving you even more feedback, and that s when that open innovation also starts to pay benefits. Yeah, that s a good point, as well. So, let s wrap up and talk a little bit about what s on your 100-day plan, your to-do list. What are you going to be pursuing that you can talk about now that fits into the innovation agenda that we just alluded to, and is it incremental innovation or is it disruptive innovation, to the extent that you can talk about it? Yeah, so it s a little bit of both. So, one of the things in my first 100 days is to define what that innovation process is and we re fairly - - I need to start over, sorry. So during my first 100 days, some of my objectives have been put a process in place and hire some people, set up those labs, and start to gather the ideas, and so that s where we are right now. So we have a few things, from a prototype perspective, that we re working on, and that s an important point -- is that in an innovation lab, you re building prototypes; you re not building the product where it s functioning 100%. 13

14 So a few things that we re trying to prototype would be virtual credit cards, and what I mean by that is I m a painter and I have three employees, and we re painting a house and we run short on paint. I can send one of my employees down the street to the paint store, the big box store, and through my cell phone, temporarily issue them a virtual credit car number with a limit on it, and I can control the spend on that so that they can only buy paint. And let s just say a further constraint may be it s only good for an hour. So if that employee goes in there and tries to buy paints and brushes and ladders for his own personal use, because I ve set those parameters, it would be denied. And so that s one of the things that we re looking at prototyping. And then, some of the other things are around game implication, and what I mean by that is how do you get people to use your devices in a manner by which every time they do something, they get intrigued and they want to do it more. So a good example of that would be around expense control and so I m a traveler for our organization and I just flew to new York City and when I get off the plane, they know I have to eat dinner, so I get a voucher or a coupon that says, if you eat at Sal s Pizza parlor, it s 20% off your bill. Well, that might keep me to maybe $10 or $15, as opposed to going to that stake house 14

15 where it s going to be $50. So, through gamification, you can incent your employees (A) to do the right thing, but also, you know, I look at it as it s like geocaching, where you get them to go see the city and do some things that are entertaining, so it s not just all business all the time. And so, we re looking at some things in that area, as well. And then, the final area out of the gate, again, remember, this is just my first 100 days, would be around partnership marketing. How do we get the right advertisement, coupon, offer, etc., in front of the cardholder at the right time, when they re actually making a purchase? So, when you go into the grocery store today and by the time you re done paying and you get your receipt and on the back of it is all the coupons, well, what happens if while you re going up and down the aisles, through nearfield communication or some other protocol, when you go down the spaghetti aisle, I can send you an alert that says, hey, this pasta sauce is $1 off if you buy right now, and influence your buying behavior while you re in that store. So those are the three top things that we re looking at right now in the lab. Well as I said earlier, sign me up because they all sound great. It sounds like what you re doing is really exciting, and that you 15

16 really are pursuing innovation in a way where you re creating an environment for customers to provide you with feedback to thins that you can then evolve, based on their experience. So, we re really excited to keep track of what you re doing and to talk to you as your 100 days becomes 120 days and 150 days, and so on so that we can be kept up to date on your progress. Chris, thanks for taking time out of your busy schedule. Absolutely, and thank you for your time, today. Thank you. 16