Something altogether different
The Digital Catapult Centre is something altogether different - a national centre to help advance the UK's best digital ideas.
We sent Nick to check it all out and report back on his findings.
A Digital Catapult
'A Digital Catapult Centre Brighton Tester Session'. Try saying that whilst munching on a digestive biscuit. This was the billing of the Digital Catapult event organised by Wired Sussex hosted by ClearLeft, just a short stroll from our own office.
They'd invited the CTO from American Express to share his thoughts on Amex as a technology company and their digital aspirations.
'A digital what now?'
The Digital Catapult Centre is a national initiative to help UK businesses unlock new value from sharing proprietary data in faster, better and more trusted ways.
Regional centres are opening around the country and the Digital Catapult Centre Brighton (DCCB) will; “focus specifically on projects that encourage innovation and value from real-time and location-based data – known as the Internet of Place.”
The centre will help; "create links between universities and business that enable cutting edge, pre-commercial R&D findings in the Digital Catapult challenge areas to be converted into commercial market opportunities which can be prototyped and piloted by start-ups and SMEs.”
Brighton - digital hub
Phil Jones, Managing Director of Wired Sussex, welcomed us to the first event from the Digital Catapult Centre Brighton and painted a picture of tech growth in the city.
- In 2014 there were more Brighton startups than other large cities (like Edinburgh for instance)
- Brighton has the highest number of startups per capita outside of London
- At 3.3x the national average, Brighton has the highest density of digital companies in the UK
- Digital businesses are contributing £1.75billion to the local economy
Technology, Strategy & Disruption at American Express
Next up: Nik Sathe, Amex CTO.
Via PayPal & Google (where he led efforts for the Google Wallet), Nick finally ended up at Amex but it all started in software engineering, a skill he tries to maintain.
Nik described four trends that have been transforming the payment industry. He pinpointed a recurring theme that payments technology is not so much about transferring money, but about transferring value; connecting buyers and sellers
Four payment industry trends
- 90s, internet, digital revolution
- Large retailers (amazon/ebay) create single marketplaces
- Market catered for the longtail
- More selection, more value
- Software engines added value to the relationship . For instance - Amazon knew exactly who you were, could make recommendations and didn’t feel anonymous anymore (similar to the previous relationship between buyer and butcher)
- 2008, iPhone - balance of power changed in favour of consumer, the consumer was king
- Red Laser, ebay - a new concept in showrooming - a digital company customers could stand in another company’s bricks & mortar showroom and shop/compare prices
- People connecting with people
- Getting recommendations on things - used to have industry reviewing products & making recommendations
- Yelp - people trusted their friends & other shopper’s recommendations more than the professional intermediaries
- Social was a stimulus for sharing economy e.g. Uber / Groupon
- Where someone is as important as who they are
- Nov 2014 marked a tipping point, the number of Google searches on mobile overtook searches from desktop
- More map searches were for things rather than places (e.g. burgers, TVs, hotels)
- Maps are emerging as a primary vehicle for search on mobile
- Location important for creating connections between buyers & sellers
"Nov 2014 marked a tipping point, the number of Google searches on mobile overtook searches from desktop"
Amex Commerce Platform
Amex is transforming, from a provider of payments to an enabler of commerce. From a proprietary system to an open Commerce Platform allowing others to compete in the ecosystem.
- Connecting buyers and sellers, the network
- Manage risk by running the network, having relationships with merchants and consumers </li>
- Increasing the size/footprint of the network - the value of a network increases with an increase in the number of endpoints of that network
- Insights/big data/machine learning can help
- Rather than lots of one-off integrations, defining open APIs that partners can use e.g. Facebook - linking your Amex account with Facebook account
- Apple - open APIs to them allowing Amex points to be spent at Amazon, McDonalds, ApplePay - Additional source of value to merchant - increases likelihood consumer will buy more
- Digital companies/partnerships will help create Amex vision of Commerce Platform
The Future of Commerce?
Amex are looking to future innovation, expanding what's possible. For instance a mechanism for further opening up API to merchants e.g. Uber integration in 16 days .
They are also working on Integration with Jawbone fitness band, something which would never have happened in the past Jawbone AmEx payments .
And of course - The Internet of Things (IoT) - All areas of your life/digital life become commerce aware (e.g. oft quoted example of your fridge ordering your food!)
Increasing the power of the networkAmex wants to provide the platform to power IoT commerceTrust issues - sharing information to other providers - a value exchange, giving up private/personal information in exchange for convenience (e.g. Siri). Consumer should know what they are doing/sharing and have a clear mechanism for undoing it.
Final Thoughts on Amex and platforms for commerce
I found it interesting that Amex see themselves as transforming the Payment Industry rather than disrupting it. Although they are a technically progressive company, I wonder whether their focus on driving adoption of their own Commerce Platform is a blind spot and they will, themselves, be disrupted by newer players.
There are many candidates, but two possible challengers come to mind, Stripe and GoCardless who between them are creating alternative payment models and platforms and who might remove the need for an Amex Card altogether!
“Stripe is the best way to accept payments online and in mobile apps. We handle billions of dollars every year for forward-thinking businesses around the world. a company that provides a way for individuals and businesses to accept payments over the Internet.”
“Stripe’s bold bid to make money as easy to send as email” (http://www.wired.com/2015/04/john-and-patrick-collison/)
A UK online Direct Debit provider founded in Jan 2011 trying to fix the broken DD system in the UK.
“Bringing Direct Debit into the 21st century - GoCardless allows individuals and businesses to benefit from the great fees and low failure rates of Direct Debit, without the operational complexity associated with traditional providers.”