With innovation comes risk, and in the complex payments landscape, that risk has the potential to end in failure. But what if you changed the approach to innovation? In the latest installment of the Commanders In Chief Series, Anthony Walton, founder and CEO of Iliad, discusses why looking at payments innovation differently could mean the difference between success and failure
Innovation in payments is easier said than done. It’s one thing to come up with a new solution or idea, but putting innovation into practice requires striking a balance that is not always easy to achieve.
Anthony Walton, founder and CEO of Iliad, says that the path to true innovation requires not just being reactive to change, but leading the way toward the changes you want to make. In this edition of the Commanders In Chief Series, Walton shares what makes innovation tick at Iliad and why persistence and quality thinking can go such a long way.
PYMNTS: How would you define your company’s approach to innovation?
Anthony Walton: I believe too many organizations talk about innovation without actually providing people with the means to achieve it. I make sure everyone in Iliad has the time, space and resources to think about where we are and where we think the industry is going. I’m very clear on that. It’s central to everything we do.
The development teams are tasked with constant evolution of the system, given the pace of change in payments. The aim is never to keep up; the objective is to anticipate and be ready to lead the way to build the solutions which will make testing safer, more reliable and easy to manage. The reputational risk of a failure is massive for any organization involved in payments, so we recognize the importance of what we do. It’s a serious business.
If we fail to create new solutions, the responsibility rests solely with me. I believe failure in innovation is entirely to do with the people at the top not giving all of their teams a mandate to go out and create with the tools they need to do it.
PYMNTS: What is the most innovative thing you’ve done?
AW: The most innovative thing we’ve ever done is to rip up the inefficient, manual approach to testing payment systems and develop a new way of doing it.
There is a culture, which still exists in many organizations, that tries to build scale and confidence in testing by adding more and more simulators. This “buy another simulator” approach increases the number of people testing. However, they operate in isolation and no one has a complete view of the entire process end to end. This adds significant risk of failure when a new system goes live.
In the face of this inefficiency we invested heavily into our product set and developed a test hub that supports the entire enterprise rather than just the single tester. Our main focus at all times is to reduce risk and enable those responsible for testing to produce multiple scenarios and examine in detail precisely what happens over the course of a transaction. As the system is automated the process is simpler and more reliable.
PYMNTS: What do you think that most people underestimate about innovating in payments?
AW: Integration. This is one of the biggest challenges facing the evolution of the industry.
There are some very smart people out there who have lots of good ideas. Talking about how things can be improved is the easiest part. However, getting them to work with 30 years of legacy systems is not simple. The ability to integrate new technology with the old technology can be extremely difficult and creates problems.
The first problem is speed to market. As more and more issues are encountered during testing, the launch date moves further and further away. When you’ve invested heavily in new ideas, and you are looking to achieve a competitive advantage, the last thing you need is a delay.
The second is confidence. No executive wants to be sending out his press release for a new launch to an expectant market with doubt in the back of his mind. Is the next press release going to be to explain why it all fell over?
If you are layering new dynamic developments on top of the legacy systems you need to make sure that the “whole” works, not the component.
PYMNTS: What keeps you up at night? What concerns you most in the payment solutions space?
AW: The relentless change in new technologies that are introduced to “polish” what is old architecture. There has to be a time when the industry takes a step back and addresses the restrictions and restraints of the core systems in a more aggressive way.
PYMNTS: What trends and changes are you watching that are affecting the industry and your role?
AW: From our point of view I see tokenization as underpinning massive changes in payments. Tokenization removes the need for sensitive data to be transmitted from what we traditionally see as “unsafe” devices such as mobile phones. Extend this tokenized “safety net” further to things like wearables and the Internet of Things and people can get more creative with how they deploy payments and new payments mashups. Without tokenization all the new devices and payment methods would have been deemed too unsafe.
Additionally, I think there is a compelling need to enable immediate payments on a global basis. Consumers and corporations demand instant results, and they are simply no longer willing to wait days for something that can happen in seconds. The industry needs to supply the means to make this happen.
Our role in all of this is to keep ahead of these initiatives. We need to ensure they are available to our customers to test and prototype way ahead of deployment. Within the industry the move to agile, continuous integration and devops challenges the way that technology is built and launched. We have to ensure, as suppliers, that our products remain fit for purpose in this changing environment.
PYMNTS: What advice would you give a young innovator in this space?
AW: It’s a cliché, but don’t give up. I really believe that. There are many people that have told me what is wrong with my company and why it won’t work. However, of those that pass judgment, only one in 10 of them can actually deliver a way to improve it. If you think you have a great idea, and you’ve put some quality thinking into it, then give it a go. Make sure you have contingency plans and keep reviewing how things are going. If you start to have some progress, no matter how small, then carry on and test the idea as far as you possible can.
Take the advice of people who do not fully understand what you are doing with a pinch of salt. And drop me a line if you want to talk through your idea. I’ll give you more than an “at a glance” assessment.
Anthony Walton is the CEO and founder of Iliad Solutions, based in the U.K. A veteran of 25 years in the payments industry, he started his career with the software division of Stratus Computer (S2). This led him to work in Frankfurt, Germany, where he founded his first company, DNA, in 1996, with the intention of bringing an open system switch and test tools to the payments market. Following a merger with EPS GmbH in 2001 the company’s products, ASx and ASSET, were acquired by ACI in 2004.
Iliad Solutions was formed in 2004 to improve the way payment systems are tested. Iliad’s first product, T3, was launched in 2007 and is used in 16 countries by card schemes, tier-1 banks, processors, retailers and software development companies.