Republished from PYMNTS.com eBook: A Decade of Digital Transformation in 12 Months
One of the lasting impacts to come out of the sweeping transformation our industry witnessed over the last year is a broader appreciation for agility and flexibility, two elements that are now being recognized as necessary tools for any business in their aim to be successful in the long term.
Given all we‘ve witnessed, it should be clear by now that the future is more unpredictable than we ever imagined, and businesses need to consider how to respond to future uncertainties. The ability to solve a single problem isn‘t good enough – instead, organizations must be prepared to solve a range of unexpected problems quickly, and on an ongoing basis. Some of these scenarios will be sudden, critical and the first of their kind, some of them slow and equally consequential – and the matter of being prepared for either is being discussed in board rooms more often than ever.
Indeed, even for organizations like ours that have long embraced agility and flexibility as a core competency, the time is right to aim some of the sharper and heavier questions raised by the last year’s events:
- Have we set the required competencies in place to respond to dramatic change in the environment?
- Can we win the next race to adapt against our peers?
- Are we ready to make a call for deeper digital transformation?
I think takeaways of the past year are less about correctly guessing which consumer behaviors will stick or which payments practices will fade (spoiler alert: we simply won‘t know).
To answer these bigger questions – and especially because our industry effectively operates as an ecosystem – we have to look from the core out. We have to pull back from a mindset of patches to carefully consider the very fabric of our organizations and partnerships.
For example, an issuer that recently made the leap to the digital onboarding of customers and digital card issuing might be well-served in thinking of those projects not as individual milestones, but as the foundations for ongoing readiness and agility – part of the continuum of digital transformation as opposed to distinct achievements.
Equally, they might also recognize that absent the pandemic forcing a change, even a gradual market shift in favor of those experiences:
- combined with repeated postponements or stunted partners
- might well have also killed or substantially weakened the business.
The fact that the most digitally prepared fared better than the rest during our most recent set of adversities should be enough to underscore the point for all of us. No one knows what the nature of the next game-changing event will be. It’s about preparation – and the most prepared partners.
What is next-gen in payments?
If next-gen in our industry is a collection of present and emerging best practices in payments – and the last year is the lens through which to examine it – then it’s safe to say that agility and flexibility are the competencies and principles by which we should measure ourselves and our partners.
In my mind, chief among the many manifestations of these tenets is processing, which I believe must be increasingly human-centric and less account-centric to serve today’s and tomorrow’s use cases. Human-centric processing (HCP) is a necessary paradigm shift away from account-centric processing (ACP), or what many still refer to as modern processing.
HCP has many distinctions that make it relevant to this discussion. It’s fundamentally one-to-many as opposed to 1:1, and increasingly about having the consumer at the center – not siloed as a credit, debit, prepaid or installment account. Perhaps most importantly, it’s context-based as opposed to transaction-based, and is increasingly controlled by the issuer and user versus the processor. The human-centric processing approach provides the underlying architecture to support agility and flexibility – the most critical tools in ongoing success.
So, as we look at the lasting impacts of the pandemic era and try to gauge which critical decisions about systems and partners will most impact our future, let’s look at the competencies within our organizations and partners’ organizations to not only make us better prepared, but to also hone our innovative edge – with or without a crisis.
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