The idea came from a local Western Union team, including an IT staff member, CIO Thompson says. Having technologists stationed in various global locations helps the IT group tune into cultural norms and nuances, he says. "I don't want us to be a big monolith in corporate that doesn't understand."
Since he arrived, Thompson has been trying to make IT more responsive to business needs. He has built up analytics muscle with a Hadoop cluster and Tableau reporting tools. He also put six data scientists in strategic locations—two in the U.S., two in India and two in China.
Instead of having to wait until the analytics guys in Denver headquarters wake up and get to work, the marketing, sales and operations staff can send queries to the data scientists on call. Follow-the-sun analytics keeps the momentum going, he says. "Our business is 24/7. We get questions throughout the day and night."
Plus, each team specializes in different areas. In the U.S., the data scientists are experts in e-commerce and mobile analytics, for example. In India, it's analyzing customer trends and doing segmentation. In China, modeling risk and demographic analysis.
Improving e-commerce is a top priority for the company this year, something Wall Street investors frequently question executives about. Compared to regular retailers, Western Union does little business online, and it aims to change that. Electronic channels accounted for 2 percent of revenue in 2010. Now that number is 5 percent. By 2015, Ersek hopes it will be $500 million, or about 10 percent.
Aside from attracting customers who want to send funds and pay bills online, the website offers the company other financial benefits. Namely, Western Union doesn't have to pay commissions to a sending agent online, though it does have to pay credit card fees. Right now, while Ersek and Thompson spend money to enhance the site, transactions there carry lower margins than those conducted in physical stores. But by 2015, the margins should be up to par, CFO Scott Scheirman recently told investors.
The company is also working on ways to advance its regulatory compliance system, which is a proprietary system developed over decades and which is considered a competitive advantage. The compliance engine ensures—in a split second—that transactions adhere to the many layers of federal, state and local regulations that apply where Western Union does business. It also generates a risk profile for transactions and individuals. The system can't be duplicated by would-be rivals, at least not easily or without considerable expense. "That is a significant barrier to entry to our industry," Thompson says.
In a recent patent, Western Union describes technology it created to mask customer data from a phone operator but pass it on to remote servers for verification. With a smartphone, users could also scan and transmit codes imprinted on paychecks, for example, or the magnetic strip of a card, but the data would remain private except to the software verifying it.
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