Balancing The Innovation Equation

There’s a lot of concepts in payments and commerce that are considered “trendy.”

Some will stick. Many won’t.

And everyone across the financial services ecosystem is racing to bring the “next big thing” to market and be the next big innovator. But there’s a difference in how to be an innovator, which means being able to differentiate between being a trendsetter, adapting to a trend already in place and playing catch-up with what’s already in the market.

At Agreement Express, which aims to streamline the customer onboarding experience for financial service companies, being an innovator is all about making interactions between companies and customers smarter and easier and looking ahead to the big picture, instead of just being focused on payments, in order to leverage solutions that work best across the market.

To better understand how this is done, PYMNTS caught up with Agreement Express CEO Mike Gardner to get the insider’s take on how his company innovates, how its model fits into the wider ecosystem and what advice he has for those who are looking to catch up faster.

Catch our conversation below.


PYMNTS: How would you define your company’s approach to innovation?

MG: There are two elements of innovation for Agreement Express. The first is: We are constantly striving for ultimate customer convenience, for both our customers and our customer’s customer. We define convenience as things that remove friction from interactions and transactions. Innovation, for us, is making all interactions smarter and easier.

The second element, from an innovation perspective, is that we look at innovations outside of our realm of FinTech. What technologies are emerging that we can leverage to surprise and delight customers or ultimately increase utility of our product. We look at how technology is changing society and how that might ultimately influence our client base. For example, the sharing economy could affect our client base for leveraging underutilized assets, while blockchain may change how we track control of assets. We need to be ahead of these trends in order to determine how we should leverage them in our platform and ultimately turn them into practical uses for the market.


PYMNTS: What is the most innovative thing that you have introduced into the market, and what value did it deliver to the stakeholder group that was its target?

MG: We recently released our underwriting scorecard. Clients can use the scorecard to automatically accept, decline or investigate an applicant based on a single, normalized score derived from KYC and other background checks. The system can also provide recommendations to an underwriter for manual processing. It’s more than just achieving a centralization of data that’s being captured and analyzed during the underwriting process; it’s providing a high degree of intelligence above and beyond the individual merchant review. Our underwriting scorecard allows underwriting to be a strategic growth component of the organization, not simply a pass-or-fail arbiter. It allows the underwriting function to give consultation on how to grow the business, without increasing risk, or how to decrease risk, without increasing costs. It’s that kind of intelligence that underwriters should have always been able to provide but were lacking the tools to do so.


PYMNTS: Where do you look for innovative ideas, and why?

MG: Across the tech industry, both in and outside of payments. I love seeing what’s happening in consumer electronics, because it’s a leading indicator of what will happen in B2B. I also pay close attention to car and transportation tech because it gives us an idea of how we are going to work in the future and ultimately how our client interactions are going to change. These are all windows into how we’re going to communicate and ingest information in the future. There is a lot of relevance in these changes for payments, and I think it’s important to look beyond just the payments market to spot the trends. I also track what hackers like Anonymous are doing. I like to see what their attention is on and what we need to look out for in the security world.

I also look inward, to our employees. We host monthly company-wide sessions, called #AEXLearns, where staff have the opportunity to learn from experts in a wide variety of fields, such as fraud, personal investing, performance management and even performance arts. We have personal days specifically so employees have the opportunity to pursue interests outside of their immediate job role without taking vacation time. This helps get our entire company thinking outside of our world of automated onboarding for financial services, to get inspiration for new innovative ideas.


PYMNTS: What do you think that most people underestimate about innovating in payments?

MG: Convenience and utility are always underestimated. For example, electronic wallet projects have largely failed on every measure I give from a convenience perspective. I think, way too often, the market takes what they believe will be really trendy and then “exceptionalize” the convenience factor. They overlook the way innovation compares on a convenience basis and then try to justify the differences that, in some way, what they’ve created will be an exception. This just doesn’t work. As a result, the product doesn’t get the kind of adoption from the market because it’s only marginally better than the alternative. Which, of course, means the company doesn’t get the adoption the investments require to pay off.


PYMNTS: What person or company do you think “gets” innovation, and why? And, conversely, who or what has missed it, and why?

MG: Google gets innovation because they understand that you’re almost never going to get it right on the first iteration. Google is not afraid to try things, and they aren’t afraid to fail. Everyone has seen Google bring out products that are great ideas but didn’t work out as an actual product. They are bold enough to try and to throw away or reiterate. If you’re not open to failure and reinvention, you really aren’t innovating.

Contrast that with Apple. Steve Jobs always said his biggest job was to say no to projects. Apple doesn’t experiment. If they don’t get it right the first try, they won’t bring it to market. As a result, there is basically a giant gasp from the market when Apple actually fails at something, and the market is highly unforgiving if something does fail. If you look at the products that Apple releases as a result of this approach, they are actually taking very safe bets. In contrast, Google lets everything ride to see what works and then either scraps or iterates and changes.


PYMNTS: What advice would you give a young innovator in this space, and why would you tell her to heed it?

MG: My advice would be to look at the real challenges that merchants and consumers have working with the payments industry. Do this before you look inward at the issues your firm or other payment companies are having with customers and merchants. Too many products right now are from a genesis of an inward-facing problem, not a client-facing problem. The view is with respect to what would make this product line better or what could we do that would match the competitors, rather than what we can do to make the experience for merchants, and their customers, better. The more we look outward at the greater issues, the more we will be finding solutions to structural problems that actually exist, rather than solutions that are resolving problems that we have created for ourselves.


Mike Gardner is the CEO of Agreement Express, the onboarding automation software trusted by Fortune 500 financial institutions all over the world. He has led Agreement Express to become one of the most respected onboarding platforms, helping financial institutions create fast, digital, client onboarding processes. Mike has become an onboarding thought leader with the Electronic Transactions Association (ETA), Merchant Acquirers Committee (MAC),, Mobile Payments Today and more. Earlier in his career, Mike held management positions at Canadian Pacific, Cryptologic and PwC, and he holds an MBA from Queen’s University.


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