As an organization that has been in business for about 170 years, Western Union knows a thing or two about the evolution of modernization. Built upon the foundation of paper, the company has embraced the opportunity within electronic payments over time in a powerful modernization push that continues to accelerate.
Digitization will continue to be a key focus for Western Union as it progresses along its growth trajectory, and according to Chief Financial Officer and Executive Vice President Raj Agrawal, that strategy is having a profound impact within the firm’s own back-office operations.
Speaking with Karen Webster, Agrawal traced Western Union’s internal digitization strategy as an important component of the organization’s overall growth. In order to contribute to a broader corporate vision, he said, CFOs must act as collaborators, and set an example within the enterprise to overcome internal inertia and embrace digitization in ways not previously considered.
Customer Stickiness
Even before the pandemic hit, Western Union had been relatively far along its own digitization journey, having already gotten rid of paper in the back office. While the coronavirus crisis has intensified the need to connect with customers via digital channels and offer more valuable electronic products and services, Agrawal said Western Union already established digitization as a priority and a key component of its customer relationship strategy.
Today, he explained, that not only means investing in customer acquisition efforts, but also wielding electronic offerings to strengthen existing relationships. “The most important thing we think about is the customer, and how we’re developing long-term relationships,” Agrawal said, pointing to the value of delivering an enhanced end-user experience and value-added services to drive customer “stickiness.”
“We had built the pipes for the digital business over the previous few years,” he continued. “We were ready to catch customers when they were looking for digital options to send money.”
Digitization isn’t just a key component of Western Union’s product development roadmap. Indeed, said Agrawal, it has become imperative for the finance organization — and the overall back office — to optimize efficiency and position Western Union to deliver on its goals of customer service and experience.
Beyond nixing paper, he said, this meant exploring ways to apply digitization to workflows that had not initially been considered in the modernization journey. “We tried to digitize parts of our retail business that we had not even thought about before,” he noted, highlighting know your customer (KYC) verification checks as one example of an area that benefited unexpectedly through digitization. “You don’t actually have to physically see somebody in person to verify who they are.”
A Lead Communicator
An important piece of the digitization puzzle for any organization is to embrace change and cut through the internal inertia that can often hamper modernization efforts. Thinking outside the box meant embracing a new way of thinking, said Agrawal — and this internal shift is allowing Western Union to establish more permanent changes to the ways it operates as a result of the digitization push.
In the effort to cut through those constraints, however, CFOs must step up and embrace the role of collaborator and communicator. At the top level, CFOs need to drive financial strength, resiliency and growth of an enterprise to support its broader vision of growth. At the same time, they must communicate progress in a meaningful fashion, both internally and to external shareholders. Digitization, access to electronic documents and data, and digital communication platforms are integral components of that effort in transparency, said Agrawal.
But at a deeper level, CFOs must also take the lead as an example of the power of digitization, and must ensure that digitization efforts align with the organization’s overall missions. “As people see senior-level executives doing things an electronic way, it really pushes that culture throughout the company,” Agrawal noted.
Strategic modernization doesn’t necessarily mean embracing and adopting every cutting-edge technology that’s available, either. As Agrawal explained, Western Union is open to exploring the potential of tools like blockchain and digital currencies, but has not yet found these technologies to bring value worth the investment. Offering customers choice in how they use products is also important, meaning Western Union must not only embrace digital channels, but must also offer an omnichannel experience to meet users’ needs.
And while many of the digitization initiatives put forth amid the pandemic are likely to become mainstays within Western Union, there is value in human interaction, Agrawal said. For finance leaders, it is important to take a considerate approach to digitization to ensure that technological investments can drive internal efficiencies, meet customers’ needs and support the overall goals of the enterprise, rather than digitizing for digitization’s sake.
“I don’t think you can be a good CFO unless you really understand the business and put yourself in the shoes of the business leaders,” said Agrawal. “I do believe the finance organization at Western Union is viewed as very much a strategic business partner first, and a finance partner second — and I think that’s true for many of the key business leaders around the company.”
