Jahangiri: What emerging technologies are changing the face of the payments landscape?


Drumm: Innovation from the relatively newly-emerging payment participants like PayPal and Google is fascinating right now. People trust banks with their money and payments - even if that trust has been diminished in some markets outside Australia –so these new participants have to deliver very convenient and simple solutions to build market share. Some of these may get traction and may be difficult for more established participants to replicate.


Jahangiri: What do you foresee as the next ‘big thing’ in payments in retail banking?


Drumm: In recent times the ‘next big thing’ has been technology that adds to the customer experience. I do not see this as changing. For example, through online banking we have moved to provide a single view of all your accounts with a product called ANZ MoneyManager. Many financial services providers offer SMS alerts for low balances or to confirm debits/credits – and this gives great control to customers. Contactless payments will add considerably to customer experience. I have found that I am now very willing to use my contactless card for low value payments such as coffee, whereas previously I would not have considered using a card, even with PIN. If my sample of one can be considered statistically significant, the possibility of contactless displacing cash is very exciting for retail banking.  


Jahangiri: How do you see the mobile payment channel evolving in the next three to five years?


Drumm: It will be an interesting time, for both issuers and acquirers. ANZ has established ‘WING’ in Cambodia, which provides mobile person to person payments, and is piloting an application called ANZ ePos Mobile  in Australia, which allows merchants to use an iPhone to accept credit card payments. Despite the prevalence of mobile everywhere, mobile payments seem to be having more traction in emerging markets than in more established markets like Australia. Even in Japan where mobile NFC technology has been available for years, only one in eight people who have a payment enabled phone use it.


Jahangiri: What are your key priorities for the next 12 to 18 months?


Drumm: We have products in development that we expect to launch up to the end of the calendar year but after that it will be the important task of embedding what we have delivered.


Jahangiri: What are some of the security issues with mobile and contactless payments, particularly with respect to the growing trend away from PINs and signatures for capped transactions?


Drumm: In reality I do not see mobile or capped contactless payments as significantly less secure than PIN and signature.


While it’s important not to ignore the security concerns that have been raised, for example the possibility of intercepting mobile payments, I am confident these will be addressed before the possibility becomes reality.
I expect that some customers may take time to be comfortable with both payment methods.


One reason is concern about the physical devices themselves and the perceived risks of losing a payment-enabled mobile phone or contactless card.


Jahangiri: How do you keep abreast of the emerging trends and disruptions in emerging payments, consumer cards and unsecured lending in the retail sector?


Drumm: It is obviously difficult as things move very quickly. Reading industry publications and attending conferences helps but an important contributor is being part of an organisation that is represented in a number of diverse markets. ANZ is the largest Australian bank in Asia and this is where a lot of mobile and broader payment and loyalty innovation is occurring. Our colleagues in New Zealand consistently deliver innovative products and customers there are fast adapters of new technologies.


Jahangiri: How do you foresee social media networks (Facebook, Twitter and Web 2.0) impacting emerging payments and consumer cards?


Drumm: Social networking sites are having a profound impact on how people interact and make all sorts of purchasing decisions. They are consistently the most popular sites on the internet and some surveys suggest that around 70 per cent of people have joined a social network at some point. More specifically Gen-Y and Millennials (who already wield more than $350 billion in direct spending in the US alone) care what their friends think and what their friends are doing, not what we tell them. Many financial institutions have a presence in social media networks but there are few examples where interaction – that is, inclusive, two-way communication – works well or has been monetised. ANZ has had the opportunity to partner with MySpace to introduce the MySpace Recharge reloadable prepaid card. Working closely with MySpace has been a great opportunity to learn from one of the leaders in social networking about the potential of social networking - but also the challenges. 


Jahangiri: From a global perspective, which country is leading the charge in adopting next generation payments?


Drumm: I don’t think leading adoption is limited to only one country. Bump Technologies in the US has produced an amazing innovation for PayPal which transfers money between iPhones by bumping the two handsets together. How it works is quite stunning – using GPS to match handsets being bumped - and apparently in the short time since its release has already been downloaded more than a million times. Time will tell whether it meets a customer need. Mobile in Asia is bringing cheap, efficient payments to mass markets. I think the Barclaycard One Pulse is an example of leadership in bringing together transit and payments.     


Jahangiri: Some industry observers cite a resistance between telcos and card issuers to integrate their mobile phones and payments offerings as the main stumbling block preventing the rollout of next generation contactless payments.  What are your views on this? 


Drumm: This was an issue in the early mobile payment trials with NFC-enabled phones, mainly due to the way the payment functionality was implemented. ANZ is piloting ANZ ePos Mobile, which is an iPhone application that lets small business accept credit card payments. It bypasses the SIM issue as it delivers the payment functionality through an application downloaded to the iPhone. Another option is a contactless payment sticker that can attach to any mobile phone. A sticker delivers great choice to a consumer, allowing you to attach your chosen financial services provider to any model of mobile phone with any telecommunications provider.


Jahangiri: What keeps you motivated in your job – is it the technology or the sector?


Drumm: The sector. There is no doubt the technology is fascinating but I find incredible motivation in the challenge of trying to identify what will work or not work and then successfully delivering something new into a market.


Jahangiri: Every IT leader has a legacy they wish to be remembered for. What is yours?


Drumm: I am not sure about the word ‘legacy’. I have contributed to the delivery of some exciting new products and services – some a little ahead of their time - but what I would like to be remembered for is more about people. I have a great team and hope that past and present team members feel that I have helped them achieve their very best.