In this interview, Ian Clowes, Co-Founder and CEO of Payment Cloud Technologies (PCT) shares his insights about emerging industry trends, the mission of PCT and the changes brought by it.
Financial IT: Hello Ian, first of all, we would like to thank you for this interview. Could you please tell us more about Payment Cloud Technologies (PCT) and your career path that brought you to launching PCT?
Ian Clowes: PCT was founded in 2007 by myself and Frank Lambe as Payment Card Technologies and initially excelled in prepaid programme management.
However, after careful monitoring of the wider economic landscape and consumer trends, we became convinced that the time was right to enter the financial services market. We developed a solution that could challenge the mainstream banks and enable fairer access to financial services for customers worldwide.
Catalysts including widespread consumer dissatisfaction with mainstream financial institutions, a noticeable shift to digital payments, and over two billion unbanked persons globally were the reasons behind our rebrand as Payment Cloud Technologies.
In November 2016, we launched our cloud-based digital banking platform bank.VISION which signified our coming-of-age in this market, marking our full transition into digital banking pioneers.
Today, we are spearheading the FinTech industry as it takes on the long-held dominance of the established banks. For years, high market entry barriers have restricted challenger banks and new, dynamic financial services providers from delivering fit-for-purpose products to meet today’s consumers’ lifestyles.
PCT is changing that by opening up the banking market, enabling businesses to secure rapid market entry with dramatically reduced implementation costs and deliver proven banking-grade services at a fraction of the usual operating costs.
My own background has taken in over 20 years in the banking and payments industries. I worked at Abbey National for 16 years, holding numerous senior roles including Head of Banking, and Director of Group Payment Services. I also sat on the boards of BACS and APACS during the payment industry’s more traditional cards and cheques phase.
From 2005-2007 I was Director of Client Relationships and Commercial at Unisys, where I won, managed and developed large outsourcing payment deals with tier one banks. I also helped to coordinate the business’s global payment strategy, before founding PCT in 2007.
Today I manage the business as CEO. I am also currently a Non-Executive Director of the charity banking company Change Account Ltd and airline payments experts Travel Welfare Ltd.
Financial IT: How does Payment Cloud Technologies differentiate itself in today's marketplace?
Ian: Today, it’s crucial for new challengers to hit the ground running with a first-class digital banking proposition that they can trust.
For these institutions, the PCT difference is that we are a proven FinTech business, which already boasts an established pedigree in digital banking, with flagship clients including Change Account, An Post and Unisys.
We have the ability to get prospective financial services providers to market so much more quickly and cost-effectively than was previously possible.
Using our cloud-based technologies, implementation costs can be reduced to £500k rather than the usual £10-15m, market entry time shortened from 2+ years to 6-9 months, and digital banking enabled at 20% of the traditional set-up and operating costs. That is a significant leap for us and the market as a whole.
Financial IT: What are the solutions that you bring to market?
Ian: Our entire VISION product suite is underpinned by digital.VISION, a proprietary, robust and dynamic middleware. It has been developed to evolve and keep pace with the latest innovations, developments and changes in the industry in order to quickly apply the most relevant and up-to-date technologies to our customers.
bank.VISION is the UK’s first digital banking platform using an e-money licence. It is our banking-grade platform in the cloud, allowing businesses to enter the market and deliver financial services online, via mobile and in-branch.
Businesses using bank.VISION can provide their customers with all the benefits of a standard bank account, including a guaranteed worldwide debit card, personal bank sort code, IBAN and account number. They can also integrate innovative bill payment facilities and money-management tools including digital wallets and SMS payment alert facilities.
We also continue to serve the prepaid card market. Our card.VISION solution is a full Mastercard/VISA prepaid card service for a diverse group of sectors. From travel money, finance, government benefits, general spend, corporate expenses and payroll, to the replacement of gift vouchers, cheques and cash, card.VISION designs, delivers and manages bespoke debit/prepaid programmes to streamline customer service and business efficiencies.
Financial IT: Payment Cloud Technologies recently announced further expansion into Africa. What makes the African market an interesting one for Payment Cloud Technologies, and what are your major offerings for this continent?
Ian: I worked in South Africa some years ago on an IT project and, based on my conversations with banks and retailers then, it was clear to me that the market wasn’t quite ready for a wave of digital disruption.
3-4 years ago, there was some reluctance to consider Azure and other cloud platforms. Security was a concern, but the technology has changed and developed in such a way that investors are now more prepared to fund new banking ventures in the continent, when they may have been more cautious before.
Today, Mastercard and VISA are champions of financial inclusion in Africa and have done great things in that field. Inclusion is now a huge priority and we are seeing huge investment in new digital banking systems to provide people with the accounts that they need. That said, there are still 330 million adults across Africa lacking access to formal financial services, and it remains the largest unserved market that has been excluded from the international financial system.
Having established our ability to drive inclusive digital banking products for the underserved and underbanked in the UK with our strategic partner Change Account, we quickly recognised PCT’s potential to make a similar meaningful impact across the African continent.
We saw the market as a natural progression for PCT, and felt that the time was right to move into the region. In March 2017, we launched PCT Africa to enact positive social development by catalysing cash digitisation and South Africa’s high smartphone penetration, and to work with local organisations to deliver fit-for-purpose financial products across online, mobile and in-branch.
Financial IT: What are the emerging trends you see in the industry today and how does Payment Cloud Technologies address these new challenges and trends?
Ian: There are currently several phenomena driving change, new trends and new challenges in the industry.
Firstly, we’re witnessing an increasing number of financial services businesses adopting the cloud. In fact, Bloomberg report that at least 25 of the world’s 38 largest financial institutions and insurance companies have signed up with Microsoft and are beginning to put applications in the cloud.
PCT was one of the first companies to harness the power of the cloud, to develop a new generation of digital banking platforms , which allows new challengers to enter the market on a level playing field and keep pace with the established providers.
Secondly, we’re seeing a real desire from challenger banks to enter the market to deliver innovative financial services to underserved demographics. The world may have two billion unbanked adults, but comprehensive financial inclusion means serving underserved consumer groups too.
For example, 44% of millennials do not feel that their bank understands them, while 52% of UK SMEs say banks are not business friendly. There is a clear need for change in the industry to service these groups, and PCT is already actioning that change: in February, we announced a new digital community business bank with ULUS Group to provide top-quartile banking services specifically for the UK’s Ethnic SME businesses.
bank.VISION enables challengers such as ULUS to enter the market and deliver highly-tailored propositions to specific demographics, and we are already working with prospective new banks that are specifically looking at millennials’ financial situations, and how best to help them with that.
Finally, the triumvirate of The Bank of England’s drive to open up the Real-Time Gross Settlement (RTGS), the Financial Conduct Authority’s (FCA) commitment to driving competition in the current account market, and incoming Second EU Payment Services Directive (PSD2) has got the industry thinking about how best to cope with these changes and market demands.
At PCT, we’re advocates of the cloud’s power to help businesses navigate major changes in the industry with relative ease. We will be educating the industry on some of the cloud’s key benefits in this environment at our inaugural PCT in Action event, July 11th 2017 in Moorgate, London.
Ian Clowes is the Co-Founder and CEO of Payment Cloud Technologies (PCT). As former Director of Abbey National Bank (now Santander) and Unisys, Ian has over 20 years’ leadership experience in the payments industry, including previous board-level appointments at BACS and APACS, amongst others. Ian is currently a Non-Executive Director of charity banking company Change Account
Ltd and airline payments experts Travel Welfare Ltd. He is also an Advisory Board Member of the Emerging Payments Association, the UK’s leading trade body advancing payments innovation. Ian holds an MBA from the University of Warwick.