Ann Cairns, vice-chairman of Mastercard, is a scheduled speaker at Mobile World Congress in Barcelona, February 25–28. The company will have a big presence at MWC this year and its main message will be trust. Cairns, who has a mathematics degree and a M.Sc. with research into medical statistics, has over over 20 years’ experience in senior management positions across different industries. In addition to an early career as an award-winning research engineer which culminated in a position as head of offshore engineer planning for British Gas, Cairns worked as head of the financial services group at Alvarez & Marsal, CEO of transaction banking at ABN-AMRO, and held several senior positions at Citigroup. She recently spoke to The Innovator about the global payment technology company’s interactions with fintechs, the evolution of payments and the use of data for good.
Q : How does Mastercard work with fintechs ?
A: In addition to banks we are working very actively with lots of other players in the ecosystem and with the startup community because we recognize that the world is changing quickly and innovation is increasing. We bring our expertise and support [fintechs] with our global programs like Startpath or Accelerate, with our Labs.
We are a big network so we can’t just put something out into our core systems and immediately roll it out to 200 countries. We have to make sure our network is secure. People trust us. But we want to be able to experiment so we have set up a process that allows us to work with startups around the world through our Start Path program. Through that program we are working with startups in retail, security, Big Data and AI and helping to accelerate them into the market. We are also connecting to the global developer community by holding hackathons in places like Australia and Israel. And when we see companies out there that are core to our business we invest in them and sometimes buy them. Brighterion, an AI company which specializes in real-time fraud prevention, is an example of a company we acquired. It does behaviorial biometric authentication. This is great because it gives us an additional way of securing a payment or transaction it works by using technology to understand your behaviour, so if you took my phone and tried to make a payment it would know by the way you struck the keys that it was not me and enable our network to decline the transaction.
Q : All big corporates are trying to bring innovation in from outside but few have mastered the best way to do it. What are some of Mastercard’s key learnings ?
A: Mastercard has multiple ways of looking at this. For example, when we buy companies we bring the CEO and internal talent along with it, it’s not enough to just buy a piece of technology, you need the talent too. The other thing I feel is equally important is taking the core part of Mastercard into that company so that you get the benefit of the synergies of one culture as quickly as possible. That has been very important. If you don’t do that you end up with little islands that hook to your network and in the long term that doesn’t drive benefit. If you get cross pollination of people that will be reflected in the inherent thinking and design of new products.
The other important thing is that technology must be embraced and understood by the people at the top of the company. With the addition of technologies like cloud computing, blockchain, machine learning and AI, the pace of change becomes exponential. I am not an expert in AI but I was trained in mathematics and to develop computer models and at that stage I could code. The truth is even today I understand enough to see how to apply things. It is really helpful to have that kind of background and to have the interest. It makes me want me get out of bed in the morning to know how blockchain really works and what can we use it for, to know what are the use cases for AI. Right now we are all at the start of the journey into unlocking the potential of these technologies we already understand how it could increase efficiency by replacing call centers with chatbots, for example. We also understand how to use algorithms and AI to detect fraud much better than we ever did before. At the same time we have to be careful: we can’t use technologies like AI in a black box environment. We need to be able to understand and explain how the algorithms work to ensure there is nothing inherent that could be detrimental to the people we seek to serve, the businesses we partner with or our own brand.
Q : In addition to ethical questions around AI lots of questions are being raised about the use of personal data. What is your take on that ?
A: It’s a tough nut to crack. Ethics are different in different parts of the world. What you find acceptable in China is not acceptable in the U.S. At Mastercard we are applying GDPR [Global Data Protection Rules adopted in Europe] on a global basis. We think consent is the right way to go and it also creates business opportunities. Mastercard and IBM have founded Truata, an independent trust to conduct analytics. It takes data from companies, it cleanses personal information and allows analytics to run and answers questions without infringing GDPR. It is a great example of how some people say ‘oh no, more regulations’ when in fact regulation can create business opportunities.
Q : Mastercard is branching out into some new businesses, like data analytics. For example, the company just signed a new deal with France’s Credit Agricole, which includes a subscription to Mastercard’s data analytics services, which are based on technology that Mastercard acquired when it bought Applied Predictive Technologies for $600 million in 2015. How do these services fit into Mastercard’s overall strategy?
A: We live in a world where people can move from physical to digital and back again, where commerce is enabled through phones, websites, fitness bands, smart mirrors, cars, shoppable windows, and any other environment you can think of. In this context, Mastercard is applying technology in ways that add real value for partners, banks, retailers and digital companies, who in turn, are helping to create new solutions that address and adapt to today’s digital lifestyle.
Mastercard is also deeply engaged to propose frictionless shopping and new payment flows to smart cities and added value solutions beyond the payment. This includes the artificial intelligence and device based insights of our Brighterion and NuData businesses, as well as test and learn capabilities of APT [Applied Predictive Technologies, which was acquired by Mastercard in 2015].
We combine offerings with payments expertise to provide financial institutions and retailers with actionable insights and solutions that lead to improved value and experiences for consumers.
Q : How does Mastercard see payments evolving ?
A : On a cryptocurrency side, we opened in 2017 access to our blockchain technology via our API published on the Mastercard developers’ platform to create new digital commerce experiences. And in 2018, we have expanded our ability to do this in multiple ways, one of which is hiring 175 new employees in Dublin focused on driving innovation and creating the future of payments.
Q : During the World Economic Forum’s annual meeting in Davos the Mastercard Center for Inclusive Growth and The Rockefeller Foundation announced a projected Data Science for Social Impact with an initial commitment of $50 million and an invitation to other companies and philanthropies to join. What do you hope to achieve with this initiative ?
A: The idea behind the collaborative is to identify key priorities and investment opportunities to accelerate data for good, whether that be through research, skill-building or the development of new technology platforms. By growing the data science capabilities of non-profit, civic and government organizations, the collaborative can help local leaders uncover new insights and trends from their data and build more impactful programs for the communities they serve, and give us all a chance of solving some of the greatest challenges of our time.