Commerce Conversations Roundup: February 2023

DCA Strategy Sprint: Open Banking

Twelve DCA members white-boarded the business opportunities created by open banking.

On Wednesday, a dozen DCA member executives worked together to brainstorm and document the business opportunities that will be created by the full implementation of open finance principles.  Like our November Strategy Sprint on tech disruption, the session was an opportunity to look into the near-future and assess likely positive and negative impacts on companies and digital commerce more broadly.

The group worked in small groups to brainstorm and document answers to the following questions:

1. As consumers assert more control over their data, who wins?
2. What’s the core value proposition that will drive this forward?
3. What are the most powerful forces holding it back?
4. What are the compelling use cases or worthy pilot programs in the following three areas:
   • Financial services and insurance
   • CPG and loyalty
   • Housing and real estate

Clippings from the Conversation

Dozens of ideas were shared and chewed over.  One example stuck with me – it’s the kind of thing we just take for granted, and it doesn’t get fixed in part because people who have the problem tend only to have it once: the sometimes mind-bending bureaucracy associated with emigrating to a new country.  Shortly after moving to the USA, my mother was asked for her social security number.  She didn’t know what it was.  Turns out they are issued to new immigrants when they got their green cards.  Or at least they were – you only have to do this sort of thing once, so I really don’t know how it’s done now.

On matters of banking and housing, it’s not uncommon to need an address to get a bank account, and to need a bank account to get an address.  Documentation from origin-country banks, property registers, insurance companies and whatever else are cumbersome to retrieve.  Couldn’t open finance principles and apps be transnational in nature?  Why wouldn’t one be able to share account data from RBC, Santander or Banamex with a lender in India, the UK or USA?

Questions DCA Members are Asking

• As consumers assert more granular control over their data, what will start to change faster?
• Which competitors are best positioned to grow faster when fueled by more granular consumer data?
• What specific consumer data points would transform our business if we had efficient, permissioned access to them?
• How can we position ourselves to be a trusted partner to consumers – so they will be willing to share their data with us?
• How can we position ourselves to be a trusted partner to incumbent account-holding institutions (banks, insurance companies, or integrated platforms like Apple/Amazon) so we can build customer solutions in their ecosystems?

Related DCA Resources

1. Commerce Code Episode 103: Fin-Tech Innovation & Open Banking
2. Commerce Code Episode 96: Nudging Consumers into Retirement Savings & Charitable Giving 

Payments, Promotions and the Return of China’s Tourists

China’s tourists spent $277 billion abroad in 2018. DCA’s February Expert Session explores how they will spend their money in 2023 and beyond. 

Before the pandemic, China sent more tourists abroad than any other country.  With its borders open again, there are questions about how long it will take for China’s tourists to resume their travel and spending – but it’s just a matter of time.  The pent-up demand for travel is as powerful in China now as it was in the rest of the world last year, when throngs of tourists clogged the world’s airports and key destinations. 

DCA’s February Expert Session on the return of China’s tourists is an in-depth conversation with Bo Wang, the founder and CEO of YouWorld.  YouWorld is a fintech that makes it easy for Chinese travelers to spend money abroad using their native currency via Alipay or WeChat Pay.  Bo has deep expertise in how to engage with the Chinese traveler, especially in the realms of payments and marketing.  

For a review of the Chinese tourist market before the pandemic, see this report.  For some insights into what it will look like in 2023 and beyond, DCA members can watch the February Expert Session with Bo Wang by either clicking the link in the Commerce Conversation email or by contacting us to receive access.

A Few Questions From the Conversation: 

• Now that China’s “Zero Covid” restrictions are over, where do you think Chinese tourists want to go and what do they want to do when they get there? 
• Credit cards aren’t common in China – WeChat Pay and AliPay are by far the dominant payment methods.  Given that, how do Chinese tourists abroad usually pay for things? 
• Where do promotions and offers fit in here? How does that work with mobile wallets and other smartphone-based methods of payment? 
• Three years is a long time in the technology world.  What will be most different about the Chinese tourism market now as compared to 2019?  And what has changed in terms of how payments will work? 
• What are the biggest opportunities for western brands and retailers as Chinese tourists return? 
• What are the risks for retailers, payments companies and others? 

What if everything worked?

Imagining a future where we know each other again

A senior executive just said to me, “We’re getting close to where everyone thought we’d be ten years ago.”  He was talking about data integration – being able to “see” customers in their data.  Open finance, APIs, fintechs, neobanks, consumer demand dovetailing with regulatory action – it’s all creating a new world in retail and consumer finance.

If this happens like it should, our “new world” will come full circle to the “old world” of the small-town grocery store. They knew you.  They knew your family.  If you were lucky, your parents had a tab there.  Based on nothing more than the fact that they knew you, you could walk in and buy groceries (and candy bars, and . . . well, it depended, because the lady behind the counter knew your mom).  I grew up with one of those – the Blue Goose.  It was a dying breed.

What is Driving the Conversation? 

We’re in an era of strategic merger and acquisition activity.  Some of it explicitly targets the integration of data sets for the purpose of creating better consumer experiences – e.g. Augeo’s recent acquisition of Brand Networks.  Some acquisitions are probably about data integration without saying it in the press release.

Questions DCA Members are Asking

1. If we knew our best consumers like we owned the corner store, how could we serve them better?
2. What would get our best customers to want us to know them that well?
3. What data would allow us to make behavior-changing offers? Who’s got that data?
4. How could we engage with employees and customers through social media in a way that enriches how well we know them?

Related DCA Resources

1. Check out our February Strategy Sprint! Open Banking’s Business Opportunities: Creating New Use Cases & Evaluating Value Propositions
2. Commerce Code Episode 138: How Will Emerging Technologies Change Digital Commerce? 
3. Commerce Code Episode 131: Engaging (67 Million) Customers With Social Media and AI

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