HPS CEO Abdeslam Alaoui Smaili on innovation in the payments industry
It was an absolute pleasure to converse with HPS CEO Abdeslam Alaoui Smaili this week ahead of the HPS WeMeeting conference in the enchanting city of Marrakesh, Morocco.
Abdeslam expressed his delight that the gathering will be conducted in person as HPS embarks on its transformation into a more institutionalised business. He is confident that fostering face-to-face interactions will reassure attendees that, despite the shift, the company’s core essence remains unchanged. He told me: “As some companies transform and become process-oriented, they lose the feeling, they lose the heart, they lose the DNA. This is not what we want to do.”
This evolution towards a more structured enterprise is fueled by HPS’s ambitious growth objectives. Currently, the company boasts a strong presence in strategic markets worldwide, including Singapore, South Africa, France, Mauritius, and soon, North America.
According to Abdeslam, HPS sees a world in which Economy-as-a-Service prevails, and the company is busy innovating to ensure the way it works and the products it offers all fit into that “services” model. “Everything is shifting to a service, so we have to work as a service too,” he says.
He believes that this service-based backdrop will ensure that banks and other financial services institutions can select and deploy platforms rapidly, enabling them to spend more time thinking about the difference they can make from a customer perspective. He says those magic words to me – “It is going to be all about the experience!”.
Adopting a services model opens the door to innovation. For example, the cost of failure is reduced. Rather than investing heavily in traditional technology and infrastructure, a bank can now rely on third-party services. If a product or service doesn’t thrive, it can be demised quickly, with minimal cost impact.
We also talked about Abdeslam’s views on regional differences and how each region has some specific nuances that HPS is looking to deal with. HPS is not looking to build point solutions based on regional differences, but rather one platform that can deal with all of them. This means the company can focus on innovations required to meet a region’s specific needs. The technology and the tools that have been built or acquired, and the new methods of developing software, enable HPS to have a core with branches that contain the specificities of a vertical or geography. So, for example, it has a solution for retailers and one for banks.
In Africa, for example, the focus is often on financial inclusion in places with limited network reach. In Asia, the issues are around mass adoption. So, a use case in Africa may focus on helping thousands of people. In Asia, it is millions. In Europe, it is regulation and GDPR that require focus.
I then asked Abdeslam about his views on the shelf life of cash.
He says, “I think the no-cash economy should not be the goal. But the low-cash economy is definitely worth aspiring to. Cash should be seen from different angles. For example, a study was made in Morocco four or five years ago, where we realised that cash costs 0.7% of Moroccan GDP, right? These hidden costs include producing, transporting, counting, and securing it. Added up, this costs 0.7% of the GDP. So, if we eliminate 50% of the cash, we get a 0.35% increase in GDP, which would immediately affect Morocco’s cost of debt.”
He believes that CBDCs may provide a mechanism for removing physical money while keeping the benefits of cash. There is a long way to go with this, but it is interesting that a senior leader in the payments industry could view this as a realistic possibility. Of course, CBDCs will usher in new models that require new ways of thinking and new platforms. Something I am hoping to hear more about at this conference.
Abdeslam is based in Morocco, and from what he tells me, it sounds like innovation in the payments space is moving at pace there. For example, there are moves to converge between identity and biometrics with payments. So, an ID card could be used to make payments. Abdeslam believes this convergence between identity, biometrics, and payments will significantly accelerate financial and social inclusion, which can only positively impact Moroccan society. This is an excellent example of why countries like Morocco could leap-frog the West, where legacy systems and thinking often hamper true innovation.
About the author
Dave Wallace is a user experience and marketing professional who has spent the last 25 years helping financial services companies design, launch and evolve digital customer experiences.
He is a passionate customer advocate and champion and a successful entrepreneur.
Follow him on Twitter at @davejvwallace and connect with him on LinkedIn.