In this exclusive interview, Prabhat Vira, Head of Global Transaction Services, Americas at Royal Bank of Scotland, spoke with industry expert and author of Paying with Plastic, David S. Evans to discuss what’s next in the world of payments. Specializing in change management and building businesses throughout the world, Prabhat brings with him more than 23 years of industry experience.
Living in a client-centric world, RBS turns to the user experience to drive innovation with a focus on ease of use and convergence of technology. Creating a solution that leverages emerging technologies and allows for a simple user-experience to mask a unique and complex solution will help push RBS ahead of the game.
Prabhat shares his unique global view of the payments industry and reveals what’s next for RBS.
David S. Evans: PYMNTS.com asked me to talk with Prabhat Vira about what’s next in payments. Prabhat is with Royal Bank of Scotland, where he’s Head of Global Transaction Services, Americas at RBS. Thanks a lot for joining us today.
Prabhat Vira: Thank you very much David. Thanks for inviting me.
Evans: So how did you get into the payments business?
Vira: David, I got into the payments business actually not that long ago, about five years back. I have a background in banking which goes back about 23 years now. My background is five countries and different types of banking businesses, ranging from middle market corporate banking, to I ran the bank’s global commodity finance business to structured finance to trade on a global business, and more recently over the last four years, transaction services, and a part of that being payments.
Because my background is diverse, and it has a fairly large component of specializing in change management and building businesses in different parts of the world, the bank thought it appropriate to bring me into what we call GTS, Global Transaction Services, with the view to lead in the Americas a substantial change and investment program which we consider, over the next couple of years, will take us into the top league in this business in the Americas, especially in the U.S.
Evans: So what exactly does GTS do?
Vira: Let me answer you David by first telling you what kind of customers we serve, because what GTS does is, we look at ourselves as a client-centric product group, and the client first is the approach which we take. So if I sort of answer your question by talking about customer segments, then we have in the U.S. the entire customer segment range, ranging from extensive coverage of small and middle size enterprises, SMEs, to middle market, to mid-corporate, and finally to multi-nationals.
The reason we have this wide coverage David, is because in the U.S. we have, under the RBS groups banner, we have RBS itself, which is very strong and has extensive multi-national and large corporate-client relationships, and then we have Citizen’s Bank, which is a large regional bank. If I talk about commercial as opposed to retail, of course, it’s got a very large retail business, and on the commercial side, the entire range of commercial clients, as I mentioned, from SMEs up to mid-corporate. So from a GTS perspective, we have the entire client range. We also have – and maybe the final bit on clients – we also have a large corporate presence in Canada and Mexico, with plans to build in Brazil over the next two or three months.
So over this client range, and I come back to what I call the client approach, because it’s – our whole emphasis is, how can we deliver the best of our solutions – and I’ll come in a minute to what the solutions are – how can we deliver the best of our solutions in a way in which we consider that those solutions meet client needs present, but more importantly, future client needs.
In terms of solutions, we have domestic cash management, you call it payments, which is a solution set which aims at our Citizens client base, from SMEs to mid-corporate, we’ve got international cash management, which is a solution which spans thirty plus countries off the RBS group worldwide, and actually links very nicely to our domestic cash management solutions, so in a sense we are one of the few banks in the U.S. which has this competitive edge where we have strong domestic cash management linked to one of the widest international cash management networks among any banks in the world.
So two solution sets there, linked to each other, and then as your probably know, we are a world leader in the product group called trade – trade solutions, trade services, trade processing, trade in-sourcing, and trade finance. So that’s another solution set. Then we’ve got a commercial cards business, we’ve got a merchant acquiring business which we call RBS WorldPay. We are a very active dollar clearer, so with the RBS group having acquired let’s say about 18 months back ABN AMRO. We are very strong in the three major currencies. ABN brought to the table dollar clearing and euro clearing, and RBS brought to the table sterling clearing, so between the three major currencies we’re probably one of the largest clearers in the world. And finally, our FI solution set. So that’s what Global Transaction Services does.
Evans: You mentioned you’ve worked in five countries, so you have a very broad view of payments and banking globally. In your view, what are the most significant developments going to be in payments, and if you want to focus on any particular part of the world, that’s fine, but I’d really be curious what your thinking is on what the big things that are going to be happening in payments over the next few years are.
Vira: Sure. And if you allow me, I will start from again the client approach, and describe to you very briefly what we believe the client needs are, and then I will relate that to significant developments in payments.
Evans: That’d be great.
Vira: Thank you. So we’ve actually – when we think of our clients, we basically, and I’m restricting my answer to payments as opposed to trade and trade finance and to FIs, for example. So we think of our clients, we think of client needs around nine dimensions, and these nine dimensions are online access, reporting capabilities, the ease of use of solution sets, system reliability and the robustness of service, very important, data integration and the ability for our solutions with our clients’ systems, again very important, receivables, liquidity, payables and finally international and when I talk about international, the linked foreign exchange solution which links to going cross border.
So we look at our clients from these nine dimensions, and across these nine dimensions, when we think of developments going forward, the ability of our clients to access these solutions and if I sort of paraphrase that to say ease of use, very important. So when we think of developments, and when we think of developments from a client first perspective, then effectively we are saying how can we provide easy to use, simple to understand robust solutions which meet our client needs, and how can we leverage present and developing worldwide technology to be able to get better and better at doing this.
So that’s the broader part of my answer David, now if I relate that to specific developments, and I’ll just take a couple, because when you hear me talking about nine dimensions, we could be talking about a huge number of developments. As an aside, I’ll tell you this, that in the RBS GTS Americas business, we have embarked from about seven months ago on a very significant investment plan, and I won’t talk numbers, but it’s seriously significant, and the entire investment plan is geared to client needs. So we’ve mapped up what we think our clients need today across all these client segments I talked about, we’ve mapped out how we can bring them easier and better to use solutions going forward, and that’s how our investments are going to be rolled out.
If I think of specific developments, then it’s a very wide list David. So I’m just going to pick a couple with no real order of importance. As I mentioned to you, leveraging of technology, so the ability to – we think of payments, there is a paradigm shift happening, as you well know, to electronic mechanisms. To take a couple of examples, check imaging technology, the ability to marry that, marry payment data with invoice information, with transaction data, all of this basically makes it easier for clients to basically manage their cash flows and their payment flows, and easier for them to, from a perspective of more control, more reporting, predictive modeling of cash flows, risk management tools, and using the electronic technology developments, delivery of real time information with regard to payment transactions. All of this can sort of be captured, broadly speaking, into what I said earlier, online access, use leveraging technology, reporting capabilities, and around this we have more than 50 different initiatives which are in the process of rolling out.
Since we are a European bank –
Evans: Maybe you could tell us bout maybe one or two initiatives if there’s something that’s not top secret?
Vira: Well, I will answer your question, I mean they’re not top secret, but it is competitive information, but I don’t want to duck the question, so let’s just take one, which is fairly easy to explain without getting into details.
Evans: Sure.
Vira: In the consumer space, as you know, we as consumers are accessing our banking services using a variety of delivery mechanisms, mobile as well as Internet based. And a combination thereof, of both. In the commercial space, we will see an increased ability of ease of use when I talk of mobile banking in general, and when we think of our commercial clients who are accessing payment services through us, we’d like to be able to give them the benefits of mobile technology, such that they can authorize, access, act on in a real-time basis their payments. And mobile banking will allow us to use a variety of technology to be able to do that, and we’re going to put significant development into that. Did I answer at least part of the question?
Evans: That’s fantastic. You’ve focused at least part of your time on commercial cards. Is that market mature now, or do you see significant innovations coming in the next few years in the commercial card area?
Vira: We definitely see innovation coming in the commercial card area, and again it sort of links to development of technology, because as you know technology is converging, and convergence of technology will make it easier for us to bring to the client cards, checks, cash in single devices with easier to access abilities as well. So yes, we see a convergence of technology on the way clients access their payments, and cards being one component of that.
Evans: Let’s look a little bit beyond GTS and let’s just talk, just to conclude, on payments business generally, and let’s focus on the U.S. market. If you look forward to the end of the decade, 2019, do you think consumers are going to be paying for things in significantly different ways than they’re paying for things now or say last year? Is there going to be a big change over the next decade, or is it going to be more incremental in your view?
Vira: I think there’ll be a big change. To take a couple of developments or areas of change, there will be a continuation of shift from checks to card, there’ll be as I mentioned earlier, increased number of devices or let’s say even channels going from desktop to mobile banking, which I briefly touched upon, to PDAs, to whatever other channels will develop over the next 10 years. So we’d see an increased technology development, again coming back to ease of use and quicker accesses.
We already have and we think of the next couple of years pilot programs underway to extend bill presentment and payment by leveraging the low-cost ACH network for bill delivery, so there’ll be a lot of that happening. Online banking services will also facilitate – the development in online banking services will further facilitate the delivery of bills to consumers through multiple channels. Hopefully by 2019, consumers will be able to view, click, pay bills from anywhere using multiple devices, so we see a lot of development on that.
We will see continuous, and I think this is super important, development on debit protection services. We’ll see a lot of development on fraud prevention, making more robust our access because as we are expanding using technology, customers access to their payments, we have to be very cognizant of keeping the services robust, one, keeping the services secure, two, and three, keeping the services together in terms of simplicity of use. I think that’s crucial, no doubt there’s going to be tremendous development, and we’re going to be in the forefront of that, but for me, it’s very crucial that we keep our eye completely on the ball on how our clients will access or utilize these developments, and ease of use, safe and secure and robust service we can’t lose track of that.
Evans: How about that. Those are great insights, and we really appreciate your time today, so thank you very much, and we wish you the best of luck for 2010.
Vira: And I very much appreciate your invitation, David, enjoyed the conversation with you, thank you very much.
Executive Bio: Prabhat assumed the role as Head of GTS Americas in August, 2009.
Prabhat joined GTS from ABN AMRO Transaction Banking and prior to his current role, he was the Head of GTS Solutions International responsible for delivering solutions to our GBM / Large Corporate client segment across North America, Canada and Latin America. Prior to that Prabhat was Regional Head of Transaction Banking for ABN AMRO North America, responsible for separation of the ABN / LaSalle business and creating a forward looking GTS operating model.
His banking experience spans 23 years, and he has worked in 5 countries over the last 13 years in a variety of leadership roles. Prior to joining Transaction Banking, he was Head of Structured Lending for the Americas based in Chicago and before that was in London as Global Head of Commodity Finance. He has also worked in Asia with ABN AMRO where he was in a corporate banking role building the Middle Market business in Singapore. Prabhat joined ABN AMRO in 1995, and began his career at HSBC in India as a Relationship Manager. He was also an Assistant General Manager in corporate banking and structured finance for BNP Paribas.
Prabhat holds an MBA from the University of Michigan, Ann Arbor, and an undergraduate degree in Chemical Engineering from BITS, India. Prabhat has two children and resides in Chicago.
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