Adaptive Innovation – Recalibrating for Business Resilience

Nitika: Welcome to another exciting episode of the Zinnov podcast business resilience series. I’m Nitika Goel, CMO of Zinnov, and your host for today. In the last economic crisis of 2008, banks and financial institutions were a part of the problem. However, today, as we grapple with the economic and financial repercussions of COVID-19, these very same companies are at the forefront and are a part of the solution. Today I have with me Sukanyya Misra, Head and SVP of Mastercard India tech hub. With more than 25 years of rich cross-functional experience, Sukanyya drives Mastercard’s strategy for the hub and has been recognized as a next-generation woman leader, given her role in making the India center pivotal to Mastercard’s global innovation story. Today, we will be discussing adaptive innovation, and how leaders like herself are recalibrating their thinking and learning, to ensure continued innovation and agility in the backdrop of these volatile times. Welcome to this episode of Zinnov podcast Sukanyya, it is great to have you here.

Sukanyya: Thank you so much Nitika, and thanks to Zinnov. I am really looking forward to sharing my learnings and the best practices that Mastercard is following during these unprecedented times. Thank you so much.

Nitika: Great. Sukanyya, the BFSI sector is in the thick of things today. How has the industry changed, and how is Mastercard looking at this role during this crisis and beyond?

Sukanyya: I think we all agree that COVID-19 is a once-in-a-lifetime event. It has brought in a lot of uncertainty in every aspect of our society and business. But for BFSI, specifically, we are seeing the impact in business continuity issues and operational considerations. To navigate through these times, the BFSI sector needs to focus on liquidity, credit risk, and the quality of financial reporting and disclosures, and above all, the well-being of the employees. Financial inclusion and inclusive growth are even more critical now, to make sure that we all have access to whatever we need to grow, and thrive. While managing the business, we think about progression as four distinct phases – Containment, Stabilization, Normalization, and Growth. Containment is the phase where we went into lockdown, with restrictions imposed with respect to travel, social distancing, etc., and closure of businesses. In the stabilization phase, people started complying with the social distancing norms; the schools, and non-essential services, and businesses started closing. We saw a slowdown in the COVID-19 curve, and that is when we also saw our spend levels plateauing. As we are moving from stabilization to normalization, this is when we are seeing our spending levels commencing the path of recovery – primarily because we’re seeing a gradual easing of restrictions, and phased opening of our businesses and a few other institutions. Even for Mastercard, today, we have opened up over 40 of our global offices. The Growth or the final stage is when we believe that our spend levels will surpass the pre-COVID levels; and we believe this phase will happen when a vaccine will be available to provide a cure for all.

Nitika: Great, thank you for that perspective Sukanyya. I loved the way you broke it down into Containment, Stabilization, Normalization, and then finally Growth. One of the key things that Mastercard has traditionally been known for is its powerful innovation constructs, and the technology hub which you manage that has been a pivotal part of that journey. What have been the fundamental tenets of innovation at Mastercard, and especially at the India tech hub?

Sukanyya: We are committed to making the India tech hub, into a global technology hub for our platforms. The India tech hubs in Pune and Vadodara are Mastercard’s largest technology hubs outside of the US, and it houses our local edition of Mastercard labs where R&D and innovation are incubated. In our endeavor to fuel innovation, we work with various financial institutions and our partners, like the merchants and even the FinTech community, to identify and experiment with future technologies. In India tech hub, we are playing a pivotal role in bringing all the digital payment solutions to life. We are working on many future technologies and using data solutions like alternative payments, biometric authentication, cybersecurity, and are working very passionately on solutions with respect to financial inclusion.

In 2013, we inaugurated the advanced analytics Center of Excellence, which is the largest center now in Gurgaon, and here we are equipped with world-class data analysts, data scientists, and even AI professionals to support our customers by identifying trends in spend behavior that is derived from billions of anonymized transaction data that is processed by Mastercard every year; and create solutions for the rapidly growing need of the businesses where we are leveraging all these actionable insights from the data.

Nitika: Got it. That is a very interesting perspective. So, you’ve talked about anonymized data, you’re talking about how you’re using AI/ML, you’re enhancing the customer experience, the merchant experience, and even you’re using technology as a key enabler for all of that. So, how has this pandemic impacted your approach to innovation? What have the major shifts been, or have been enabled at a global level and at an Indian center level? And it would be great if you could share some metrics and some anecdotes here.

Sukanyya: We are committed to fuel innovation for our customers, merchants, and partners. We have been a key contributor in building the payment ecosystem in India from its inception. We’ve been here for close to 30 years and have worked closely with our local partners and the governments to ensure that we customize the solution for the country. And even today, we stand true to our commitment as we work very closely with all the important partners in this ecosystem. COVID-19 has changed the way we work, we shop, and communicate with our people. So, the notions of speed, convenience, safety, are being re-examined and re-defined. So, shoppers have had to adjust to new changes when they are buying everyday supplies, owing to the social distancing norms and stay at home measures being undertaken during the COVID-19 situation. So, finding the balance between the need to protect ourselves, the need to interact with our communities, and to maintain our daily lives, is the challenge that is faced by everybody not only in India but across the world.

The usage of digital payments among Indian consumers in the current scenario stood the highest in the world – it is at 75%, followed by China at 63%, and Italy at 49%. Further, around 78% of the Indians said that they will adopt digital payments more actively over the next six to nine months, according to a recent survey that we conducted. So, the shift in behavior is particularly evident, where people continue to express a desire for contactless cards and voice concerns to ensure cleanliness and safety at the point of sale. According to the consumer poll conducted by Mastercard, we have seen an acceleration of 40% in contactless payments globally, and it included tap and pay and mobile pay during the first quarter of this year. Also, 49% of Indian consumers say that they plan to use cashless more often. A large majority, 77% of India, believes that the shift to the contactless payment is here to stay – in China it is 73%, Australia about 71%, and in Japan it is 62%. So, I believe the pivot has been the maximum in India, which is the adoption of digital and contactless payments. Now, however, to further strengthen the acceptance of digital payments, it is also important that we increase the merchant’s involvement and make the process of transaction easier and more secure. To address that, we are closely working with the government and the industry to create more awareness around digital payments. A lot of involvement in training and showcasing the benefits of digital payments solution are also happening online. To further boost the confidence in digital commerce and ensure that safety security is not compromised, Mastercard has also launched easy to use AI-based applications that help pre-empt and prevent cyber-attacks.

Nitika: Thank you for that perspective. Speed, convenience, and safety, are definitely the three vectors that we’re looking at. So, obviously, time is one of the most important factors in any equation, right? So, how did your organization change and evolve to deliver this? And how did you recalibrate yourself and your organization both to deal with this crisis?

Sukanyya: Absolutely. So, at Mastercard, we understand how difficult this time is for everyone, and we all have a responsibility to not just help those in need today, but also ensure that the world emerges from this pandemic as a more resilient player. So, at Mastercard, our operations have continued without any disruption, as we very swiftly shifted to flexible work arrangements. Across our offices, being an IT company, we are well prepared to work remotely. And so, the shift from office work to remote work has been quite smooth for us. We have also ensured that all our staff is safe and well-equipped to work remotely from the very beginning. Now during this pandemic, the adoption of real-time responses to protect against any threat of cybersecurity or fraud is paramount. And that is what we ensured as our first line of defense. We are also maintaining the electronic payment ecosystem that provides critical infrastructure security, and also our other products and services, to help our customers maintain their businesses without any disruption. So, our network allows consumers to gain access to all the necessities from the comfort of their homes.

Also, as a responsible citizen, Mastercard is working with various stakeholders, which includes governments, and also civil society, to offer support and expertise in providing solutions for those who have been impacted drastically – the small merchants, the MSMEs, and the farmers. In recent months, Mastercard has pledged USD 250 million to support the MSMEs, of which, India has got about USD 33 million, which is equivalent to INR 250 crores. We are supporting the small businesses in India using our network, technology, knowledge, and services to help the small businesses grow their digital payments awareness, and provide low-cost accepted solutions – be it online or offline; and also drive inclusive growth by enabling small merchants and Kirana stores by providing access to credit, knowledge, and tools that can drive their operational efficiencies. And above all, empower women entrepreneurs by increasing their business acumen.

For your question on what has been the recalibration that we had to do, there’s an adage that states that crisis does not build character, but it reveals it. So, in terms of leadership, I observed these three qualities emerge across Mastercard – a sense of urgency, curiosity, and competitiveness. So, when COVID hit us, we needed to act very quickly, and also make sure that there is transparency and dissemination of information across the organization, sharing of best practices and learnings. There was also a focus on curiosity, which is a deep desire to understand, guided by a purpose. And finally, the competitiveness, in terms of our ability to expect the unexpected, staying connected, with our customers, and also listen to our employees, our colleagues, and be a partner to our government and civil society. Personally, I would say that what was really needed at that time and even today, is to listen actively and be decisive; and the decisions are driven not just by leveraging information and collective collaboration, but also with compassion at the heart.

Nitika: Thank you Sukanyya. I really loved the adage I’ve always heard – that crisis helps build character, but it’s a new version, which is, it helps reveal character. I think the points that you raised about curiosity, competitiveness and the fundamental sense of urgency that has come, it couldn’t be more appropriate than what you’ve just mentioned in the case of the pandemic. Thank you so much for your time, it was a pleasure interacting with you, and thank you once again to all our listeners for tuning in to this episode of Zinnov podcast.