Big data equals speed, security for Western Union CIO
Can big data help a 166-year-old financial institution serve customers around the world better and faster? Yes, says David Thompson, executive vice president, global operations and technology and CIO of Western Union.
Western Union, which once employed Thomas Edison and launched the world's first domestic communications satellite, hired Thompson, formerly a Symantec executive, to revamp its technological offerings.
In part one of a two-part interview with The Enterprisers Project, Thompson takes us inside the company's digital transformation and explores Western Union's big data priorities.
The Enterprisers Project (TEP): What was your mandate when you joined Western Union?
Thompson: I joined five years ago from the tech industry with the mandate to be the key driver of digital transformation. We've now become one of the largest digital money companies in the world. People can make and view transactions via mobile apps. We're now deploying apps in our retail locations as well, which speeds up lines.
TEP: Don't most commercial banks have similar offerings? Why is this a big advancement for Western Union?
Thompson: Many of the things you've seen in fintech are local or domestic products. You and I can send money to each other across states all day long. That's a light business model and not very profitable, if at all. We're really focused on cross-border technology, where there's a significant barrier and you need fraud and risk capabilities.
We've really focused on cross-border remittances. You have to have compliance and AML (anti-money laundering) settlements. We have it deployed in 41 countries now and we're one of the leaders in cross-border transactions.
TEP: How do you decide which technological areas to tackle first?
Thompson: When I joined Western Union, the first thing I did was assess our global capabilities. We had significant scale and breadth. We were supporting operations in 200 countries and we had good core capabilities. So I began developing our web presence. The first year I was focused on web and our clients were responding to our web global money transfer asset. But we began hearing from our clients that they really wanted mobile first, so we switched to a mobile-first approach. Now when we deploy in a new country, we always deploy mobile first.
TEP: Will that allow you to operate with fewer retail locations?
Thompson: Our clients like to have all three options of web, mobile, and retail. So omnichannel is really what we're doing.
TEP: What other technologies are differentiators for Western Union?
Thompson: We put big data in place so we can do real-time risk assessments on transactions, which is quite difficult to do. We leverage the technology to see the individual client's risk profile at the time the transaction takes place. We can make sure it's clearing our fraud and risk engines, that it's not a risky transaction, using big data in real time. We've won awards for this.
TEP: How does that work?
Thompson: Our compliance engines use the big data history for transactions for the past five years for that client and that location. If the compliance department determines that a particular transactor or receiver or transaction is questionable, it allows us to immediately do a more detailed review. We assess risk for the individual and for the transaction. Maybe we see an individual in a country where there is a lot of nefarious activity. Transactions attached to that person are worth scrutinizing, so it will go through more screening. It may be that person has been transacting with us for years without any fraud or compliance issues, and then we can approve the transaction. Or if there are still concerns, at some point the machine can't make the decision, so it goes to a human for review.
We can also change our risk models quickly in response to changing conditions. Let's say we see a fraud trend in a very localized region. Transactions to or from this region might require additional scrutiny, and our tools let us see that quickly.
TEP: How does this benefit Western Union and its clients?
Thompson: As a result of this technology, working with local compliance officers, we're able to clear a lot more transactions more quickly. If you were not using technology like this, you would either have to reject a lot of transactions out of hand, or you'd have to do a great many manual reviews, which is costly and takes a lot of time. Our goals are to streamline our process so we can make better decisions in real time, continually test, and constantly look for patterns.