The payments sector, in particular that of B2B payments, lacks diversity, and that’s a big problem, according to Eyal Nachum. Diversity comes in many shapes and sizes, but in the payments sector, problems in two of these ways are glaringly obvious. One is diversity of infrastructure, and the other is diversity of talent. Companies that pay enough attention to these issues will flourish, he says. Those that do not, may find themselves floundering.
Eyal Nachum, banking guru at payments and banking provider Bruc Bond, has been warning of a lack of infrastructure diversity for a long time now, but with the collapse of the now-infamous German banking giant, this problem has become obvious to all. Too many companies in the payments sector relied solely on WireCard for their banking infrastructure. Now that the German provider is collapsing, all these actors are left with a big problem that they will struggle to address in time. Relying on a single provider is asking for trouble. Even if your provider is reputable and seemingly stable, as WireCard AG appeared only months ago, unforeseen disasters can befall anybody. What you want to avoid is relying solely on someone who’s waiting for a disaster to fall on them.
A problem with a single choke-point business model doesn’t have to involve the collapse of a banking giant. A simple change in client acceptance policies can mean that your bank suddenly sours on you, and functionally you are left in the same pickle – no banking infrastructure to speak of. That means, no way to conduct business, a scramble to find alternatives, and the possible dissolution of your company. That’s something nobody wants.
To avoid this pitfall, Eyal Nachum recommends that you diversify your banking infrastructure. It may cost more to sign contracts with multiple banks. It may increase your overhead and cause you to increase prices to customers. But the last few months prove that you can never be too prepared fir a disaster, no matter how big or small it is. Sign with two or three banking providers. Your future You will thank you.
The second problem of diversity in the payments sphere is that of actual diversity. Homogeneity can lead to a single-minded corporate view of the world, which in turn blinds us to the opportunities that can lie right beneath our noses.
In banking it can lead to a plethora of products competing for the same audience. Of course, there could be enough market for everyone. But a general consumer digital banking product already exists. In fact, dozens of them exist. Why not try and find a niche that is not so densely populated?
Take for example the question of home remittance. In today’s world, millions of workers travel abroad to take on jobs in foreign countries to provide for their families back home. These workers often struggle to get their banking and payment needs answered in their host counties. A Vietnamese worker in England or a Turk in Germany have different needs to the average citizen, including the need to send large amounts of money to their relatives back home. A diverse team of entrepreneurs and designers could spot this need and address it, cornering a market that others miss entirely. The upside is quite clear.
Luckily things are changing, says Eyal Nachum. More and more companies are made up of diverse trams of employees, sometimes working across national borders. As these companies overtake their competition, others will have no choice but to notice and follow suit. Until that happens, smart hiring managers will have to keep fighting the good fight and hiring diverse teams.
Photo courtesy: Global Banking and Finance Review