Interview with Conchur Gill from Be | Shaping the Future

Last month, Conchur Gill joined Be | Shaping the Future as an Associate Partner in the UK. Consultancy.uk sat down with the experienced payments expert to understand why he joined the financial services consulting firm and what opportunities he sees in the market. 

What attracted you to Be?

I wanted to join a growing consultancy firm that has payments technology at its core, to which I could add my strategy consulting experience as an additional element of the go-to-market approach. I wanted to be able to develop and offer my clients a ‘one-stop-shop’ payments strategy and implementation offering.

Further, I was looking for a consultancy firm with gravitas and reach across the continent to work on challenging large-scale projects.

Be | Shaping the Future ticked every box. It has a great track record in management and digital solutions consulting with a significant footprint in the payments industry across Europe. Be as a Group has experienced significant growth in the last 10 years and once I saw that Chris Cardwell and Tony Bernstein had come on board in the UK, I knew it was the right move.

How is Be dealing with the impact of Covid-19?

The culture at Be has informed the firm’s response to the crisis. We are doing everything we can to help our clients adapt to the new environment and ensuring that we can provide support as much as possible. There has been increased access to resources and ideas from our headquarters in Italy and across our markets to serve our clients. We have 1,600 colleagues across Europe, so there is a large pool from which to draw. 

Be operates a ‘servant-leadership’ approach. Team members take precedence and leaders are pleased to provide them with the support they need to do their jobs and fulfil their potential. This approach has manifested in a strong sense of togetherness throughout this difficult period and new remote working environment.

The leadership and wider team engage through weekly Microsoft Team huddles, regular ‘Be Connected’ one-on-one coffee break sessions, virtual meetups of the wellness society, and lots of training sessions to mention a few ways in which we continue to embody our team spirit. 

What are the challenges facing the payments industry at the moment?

The entire industry is still assessing the short, medium and long-term impacts of Covid-19 and figuring out how to respond. If anything, this crisis will expedite the transition away from cash to electronic payment methods and increase card-not-present (CNP) transaction volumes. But it is still very early to say how many other consequences of the virus and its impacts on the industry will play out. 

Apart from Covid-19, challenges typically depend on the region or market and can vary significantly depending on the vertical in which a company operates. However, key themes such as regulation, increasing competition and sustainable profitability always present challenges. 

Regulation is a huge challenge in Europe at the moment. Whether it is complying with PSD2 or responding to decreasing revenues as a result of the Interchange Fee Regulation (IFR), players in the payments space have a lot with which to contend.

Competition is increasingly intense throughout the payments ecosystem; partly due to regulation, partly due to technology changes, and partly due to a host of other reasons such as low barriers to entry. The introduction of EMI licenses and other regulations introduced to stimulate competition within banking has facilitated large increases in the number of challenger banks and FinTechs entering the payments space.

“Technology, low entry barriers and regulation means that competition is increasingly intense throughout the payments ecosystem.” 

Technological advances in mobile banking and digital payments have enabled many of these new businesses to develop innovative business models that can compete with incumbent banks due to their having a much lower cost base. 

Revenues for incumbent banks are challenged as a result. But also, a sustainable business model for challenger banks has not yet been established because challenger banks are still dependent upon interchange as a key revenue source.

For example, Revolut had revenues of £58 million in 2019. A solid performance. But £41 million of that revenue was generated by interchange fees (that were capped by the European Commission in 2015). What will happen if the EC lowers the interchange caps further in a few years? That’s a scary prospect given Revolut also posted a loss of £33million in 2019. 

What valuable lessons are you bringing to your role at Be?

Firstly, all businesses operating in the electronic payments space are to some degree technology companies now. Strategy consulting in the payments industry is worthless if it does not consider the technology side of the client’s business. That is, when strategy and technology consulting are constituent parts of the overall process and deliverable, the outcomes for the client are much better. 

Secondly, having a holistic knowledge of the payments industry, how the infrastructure works and how the revenues / commercials are interconnected is critical to providing sound strategic advice to clients. For example, the complexity built into card network pricing – and the impact that has throughout the value chain – prevents many players from understanding with any great accuracy who charges what and how one provider compares to another. Clients need help cutting through that complexity.

Last but not least, many payments companies think they understand what their competitors offer but knowing in detail is a real challenge. And that isn’t even the most important consideration. Knowing the value of what you offer vis-à-vis your competitors is key. Articulating that to the market is the ‘golden ticket’.

What do you think makes Be’s capabilities unique to solving these problems?

Commercial and business strategy, technology change, and regulatory compliance are core to Be’s offering. Our payments practice has years of experience in these fields. Addressing client challenges from a position of expertise in each of these areas generates a huge value add. 

Let’s take the ‘golden ticket’ point as an example and apply it to the issuer processor market. Lots of innovative companies (such as GPS, Marqeta, Natixis Payments, EVRY, Qrails, etc.) operate in that space. All great companies with huge growth potential. However, the complexity of issuer processor offerings (technology stack, value propositions, differentiators, regulatory permissions, pricing, etc.) when viewed accumulatively means that FinTechs struggle to understand processor ‘go-to-market’ propositions in any meaningful level of granularity. 

Furthermore, FinTechs are struggling to understand how much value a given processor’s products and services could generate for them, or how much in cost efficiencies it could create.

We provide issuer processor clients with commercial strategies that help them to understand the competition in-depth, identify the value proposition and technology differentiators of each processor and quantify the pricing benefits or challenges to potential customers of partnering with them. Once processors know that, we help them articulate it to the market and introduce into conversations with potential clients. 

We use similar approaches to create strategies for card networks and issuing and acquiring banks, alongside addressing any technology change and regulatory compliance challenges that they have due to our well-established capabilities in these areas.