Tahir Hussain helped tech giant Amazon develop payment systems designed to roil traditional finance. What lessons does he have for the banking sector?
Tahir Hussain, you spent several years at Amazon. Why is it such a struggle for banks to understand digital in your view?
I think a lot of the existing players are struggling mightily because they are thinking too incrementally. The Googles of this world are thinking in very bold ways.
«Beautifying bank branches won't win the race»
I think there will be many, many innovations in the financial space, but very much doubt whether attitudes along the lines of, «OK, we’re going to make more beautiful bank branches or buildings» will suffice. Instead, I strongly believe that those that are able to constantly identify and address customer needs will come out winners.
The banking industry is terrified of the tech threat. Is that justified?
Given the possibilities of new technologies, coupled with rapidly changing customer tastes, I can totally understand how some of the established players feel.
«The biggest gift for digital disruptors is to freeze»
But if you’re scared and your reaction is to freeze – well, that’s the biggest gift you can give to the digital disruptors.
So what should financial firms do?
I think the advice I would give to any company in the banking industry to establish that you have a customer focus – or put differently, move from the established push focus to a pull focus. Figure out what the two or three things are that you believe, based on the trends you see, customers may be doing differently.
«How can you start innovating with your assets?»
Ascertain what assets you have, what assets do you need, how you can start innovation – and, very importantly, be willing to adjust course. Stay firm on your vision but remain flexible on the execution.
What are those trends?
There’s no one size fits all. The good thing for the banking industry, unlike many other industries which get disrupted, is that most of the big players still have considerable cash. A lot of other industries get disrupted and are struggling with these questions as they’re running out of cash.
You worked on payments at Amazon. What is in planning in Silicon Valley that should really worry the finance industry?
They are in the space already, but they are taking their time. Players like Amazon and Apple are expanding and they’re not in it for the next one or two years.
«Amazon and Google are in finance long-term»
They are very much in it for the very long term and know how important payment is to building and expanding your respective ecosystem.
Any personal observations from your time at Amazon?
For Amazon Pay (a mobile payments service), it’s just about expanding the universe right now. For example, expanding to small sellers to use Amazon Pay as a checkout option.
«Amazon is quietly innovating in finance»
The Amazon brand being well-known and trusted is establishing itself. Maybe not very loud and all sexy, but they are certainly innovating.
What strengths should wealth managers be building on then?
If you think of wealth management just in money terms – that’s not what people want. Wealth management just stands for «help me through life.»
«Wealth management is being a concierge»
I think the idea of a concierge for wealth management: opening doors and enabling services. Clients also want to be told what not to do, or perhaps connect you to another person who went through a similar experience.
What does a finance player need to become digital?
If the top two or three leaders are humble, vocally self-critical and willing to totally change.
«Rome wasn't built in a day»
With those ingredients, I think everything else can be done. And, of course, you need a long-term view – Rome was not built in a day, after all.
Most financial players have been vocal about the digital threat.
It takes more than that. If you have leaders who change and don’t just talk but walk consistently over long periods of time and then have consistent success stories, I am confident that you can still emerge a winner as part of the digital transformation.
«Deeply-entrenched leaders often aren't credible»
I think very often leaders have risen in similar organizations for many years, so it’s very hard for them to be credible and change a lot.
And then…?
If you hesitate as a firm or wait and then get defensive, you will be eaten for lunch.
Tahir Hussain spent nine years with Seattle-based tech giant Amazon, including building up its business in China and most recently as head of its gift cards business. He is the founder of Munich-based TH Consulting to advise corporate clients on digital efforts and expanding internationally. He has also held senior roles at Kiveda, a kitchen-building startup, and Moberries, an online recruiter. finews.asia spoke to Hussain at Lausanne-based business school IMD.
