Every day, Western Union serves millions of customers around the globe ‒ both senders and receivers of money ‒ across more than 200 countries and territories. In January 2022, the company entered the digital banking space, marking a new era that Thomas Mazzaferro, Western Union’s Chief Data Officer, says will come to define the future of the financial services sector.
“Being able to offer financial services in a more holistic, customer-centric way is really the future of the financial services industry,” he says.
The digital banking platform soft-launched in select European markets in late 2021. “We've been in a controlled launch since 17 November,” says Mazzaferro. “And in that time, we have done thousands of transactions and thousands of payments across Europe.”
Friends and family from Western Union’s Austrian bank employee base and partner teams were onboarded to test the process and its capabilities, before a full public launch on 9 February 2022.
Through the digital banking platform, customers will have the ability to earn interest on their money, make real-time payments, hold multi-currency balances, and leverage Western Union’s extensive global payments network. Banking customers will also be able to use Western Union retail locations to withdraw or fund their accounts with cash. It is the culmination of years of work, Mazzaferro says, to transform the customer journey and modernise Western Union’s processes and capabilities.
“Western Union has done quite a bit of work over the last 18 to 24 months,” he says. "We've been consolidating our data and our customer repositories to start driving an omnichannel messaging capability, so we can provide a seamless, real-time message and create that real time conversation with our customers. We've also gone on a path of modernising our rewards platform, moving from a mainframe to a cloud-based platform called RCX, while consolidating all of our messaging platforms into one. We now have one platform to do omnichannel customer messaging, while having a modernised rewards platform.”
Masters of Reinvention
The digital banking platform is the latest step in the reinvention journey of Western Union which, since the 19th century, has evolved at the forefront of technology to meet and exceed the demands of its global customer base. Initially a communications company, it commanded the lion’s share of the American telegraphy industry until the technology’s redundancy, and then was quick to shift its focus to money transfer services. Today, it is a global leader in cross-border money transfer and payments.
The company strives to be more customer-centric, building a relationship with customers, rather than acting simply as a transactional channel for payments and transfers. Digital transformation is at the core of this shift, but customer-centricity is its north star.
"We are reinventing ourselves to become more agile and more customer-centric, consumer-friendly,” says Harveer Singh, Chief Data Architect and the Head of Data Engineering. “And we are bringing in new products to fit the financial services needs of those customers. People rely on us and trust us to deliver for their loved ones with their hard-earned money, and we want to be a part of their daily lives.”
“We see a real opportunity here,” Mazzaferro adds. “We also want to lean into our digital bank and multi-currency wallet to see how we can scale and expand.”
Best-in-Class Partner Ecosystem
Western Union’s digital banking platform is a complex ecosystem of partnerships from across the technology and fintech landscape. Leading fintech, Mambu, provides the platform and engine that drives the core of Western Union’s new digital bank. Marqueta serves as the card issuer, in concert with Visa, which also helps with fraud and compliance. Deloitte, meanwhile, acts as the delivery arm to build and deliver on the big vision.
“And really key to us is our partnership with Mulesoft,” says Singh. “They power our entire digital bank backbone for data. But what’s more important is that they provided us with the flexibility to create new services and new APIs at lightning-fast speeds. Their technology is constantly evolving, providing us with new ways to connect different software and technology.”
Singh characterises it as a “modular bank”, an ever-evolving, organic ecosystem that grows and scales from a solid core of partners and technologies. “Mulesoft plays a critical role in everything we do there, and we are constantly looking to bring in new start-ups to partner up with us, like Skill AI, which is primarily powering our chatbots and RCX, which is helping us manage our loyalty programme.”
In banking, a notoriously regulation-heavy industry, compliance is another area where this modular approach helps. “We partner with folks like Salt Edge to handle our PSD2 compliance and open banking regulations,” says Mazzaferro. “Snowflake does all our analytics, and there are many others who build and incorporate into the larger digital banking ecosystem we now have in place in select countries in Europe.”
“I would expect there to be a lot of innovation and change coming in the next three-to-five years,” he says. “And, actually, fintech is a great way to partner and get us quickly enabled into those different channels.”
Building for the Future
With the foundation in place and the digital banking platform now live, Mazzaferro, Singh and their teams are already thinking about the future, which extends beyond what Western Union is already known for. Remaining customer-centric will be key to this success, Mazzaferro says, and that goes beyond launching new products to market. It’s also about enhancing customer experience and how Western Union opens new lines of communication.
“The innovation in our technology really helps to drive not just new products and services, but also how you interface and how you provide that seamless customer journey,” he says. “There will be a major shift towards hyper-personalisation for the customer at every single part of the flow.”
“We are a global leader for remittances,” adds Singh. “But we are also reimagining our retail experience. We don't want the retail experience to be clunky. We want our retail experience to be as slick as possible so that the customer feels good when they’re transacting: it's fast, it's quick, it gives them options, but it also helps them.”
Western Union’s global retail agent network consists of hundreds of thousands of locations, an infrastructure that “no one else in the world has”. “As we accelerate rollouts of our digital bank account/ multi-currency wallet across other markets, our retail agents become part of our omnichannel offering. There is no other organisation in the world with that kind of network,” says Singh.
Singh is also emphatic that banks must learn lessons from the past two years. COVID-19 irreversibly transformed banking and how customers access their money, converting mature markets into cash-free, contactless societies, and creating enormous demand for digital products in emerging markets.
“COVID-19 has reignited the fact that the customer has choices,” Singh says. “We want to be their first choice, so our goal will be to keep innovating, to keep bringing better services and new products to our customers so that we can be a part of their lives on an ongoing basis.
And that’s regardless of whether they want to be a part of the retail network, whether they want to be a part of the digital network, or whether they want to be part of our banking network. We want to be a part of their daily lives in some way and some form. We want to use our brand, which is highly valued around the world, to ensure our customers that we will bring the best of services to them.”