Philipp Reichardt Of Airwallex On The Future of Money and Banking
An Interview With David Liu
… Creativity. As I said before, there are so many unknowns when building a fintech product and oftentimes you are faced with problems that have no clear or easy answer. Unless you’re a creative thinker it’ll be easy to get stuck and give up.
The way we bank has changed dramatically over the last decade. It was not too long ago when you had to wait in line in a bank to deposit money. Today things are totally different. You can do your banking without ever walking into a bank. In addition, the whole concept of money has changed. In the recent past, money usually meant bills and coins. But today, the concept of money has expanded to include digital currency and NFTs. What other innovations should we expect to see in banking in the short and medium term?
To address this, we are talking to leaders in the banking, finance, and fintech worlds, to discuss the future of banking and money over the next few years. As a part of this series, I had the pleasure of interviewing Philipp Reichardt.
Philipp Reichardt is the Head of Platform Sales, North America for Airwallex where he is responsible for the company’s go-to-market initiatives in North America. Reichardt’s experience includes roughly two decades in the payments industry where he helped build and lead sales organizations focusing on driving growth. His experience also includes helping scale two startups to successful exits. Reichardt holds a Bachelor of Commerce from Concordia University in Montreal and speaks five languages including English, German, Spanish, French, and Portuguese.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started in this industry?
Thank you, David. This is my second interview with Authority Magazine and so many things have happened since we spoke last time. I’m looking forward to talking about the Future of Money and Banking today.
What’s exciting about this space is that it touches every single one of us. No matter what we do or where we live, we interact with money in some way or another, and many times don’t think about what happens behind the scenes to make it all possible.
In my particular case, my first job out of college was with a software company selling their products online, which was a rather novice thing as the software world was still transitioning from retail to online sales. It was an exciting space to be in. I worked closely with our eCommerce platform provider at the time and ended up joining them full time in San Francisco. It was obvious that a key differentiator in the eCommerce space was the ability to reach as many global customers as possible and so from there on, we doubled down on expanding our global footprint and focused more heavily on the payments infrastructure in addition to the eCommerce front-end. A few years later, I ended up at Avangate which later became 2Checkout before it was acquired by Verifone and even though I was running sales, I was always very involved on the payments and global expansion side.
Can you share the most interesting story that happened to you since you began your career?
To be honest, I love what I do and find most projects and customers we work with very interesting. Having said that, one aspect that’s interesting to me every day is how international this space really is. I’ve been in many projects with 10+ different nationalities represented across the list of stakeholders which gave me a good perspective on how interconnected global commerce is and how we all depend on each other to make it work.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
Mark Twain said “Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do.” That has always stuck with me. Be it in business or personal life, I always lean towards giving things a try as opposed to being held back by doubt or uncertainty. I absolutely made many mistakes in life and failed countless times, but I also managed to sell my first company at the age of 19, lived on three continents, and ended up in San Francisco where I work for one of the most innovative fintechs, helping some of the most influential companies build out global payments products. Looking back, I did make some bold moves but the biggest regrets I have are still the opportunities I didn’t go for.
Ok wonderful. Let’s now shift to the main focus of our interview. Can you tell our readers about the most interesting projects you are working on now?
Well, the benefit of working for such a fast-growing and global fintech like Airwallex is there is no shortage of interesting projects to work on. Right now, since we launched in the US last year, we are focused on a number of use cases around cross-border money movements in a plethora of industries, including shipping, lending, investing, travel, and traditional finance.For example, we are helping a large US equity trading app launch their service globally; we are building a global bill pay solution for a large payments company; and are helping customers in the global shipping industry move payments faster and directly to their shipping companies or offer instant loans to global suppliers, something that was almost unthinkable only a few years ago. As we think ahead for what’s next, we are also looking at various blockchain-related projects.
How do you think this might change the world?
In short, it levels the playing field. What we’re seeing right now is a movement towards a world without borders, at least from a business and money movement perspective. It’ll matter less and less where you start your business as modern payment solutions give everybody access to global financial tools to run their business, sell or buy their products, allocate an investment or get funding. This is extremely powerful and will drive more innovation and more opportunities for everybody embracing the possibilities stemming from this trend.
What most excites you about the banking or payments industry as it is today? Can you explain what you mean?
What most excites me is that the level of innovation we’re seeing in this space is growing exponentially every year and has become truly unstoppable. Things that would have taken years to accomplish in the past are happening within months now, and many companies are waking up to the fact that they either level up or get left behind. What’s more exciting is that we are a part of that exponential growth. In the payments industry, we are seeing a lot more companies that are becoming more open and adaptable to tech solutions, such as rolling out a loan offering to 50+ countries at once or rolling out a global bill payment solution within five months.
For example, only three years ago, most banks would not even touch crypto currency while today those that have developed a framework around it are thriving. Another result of this ever increasing innovation is that traditional software companies are more and more turning into payments companies. For example, Shopify used to provide software to run a webstore but is now making most of its revenues from processing payments and just launched a bank account offering in the US. Then take Toast — a restaurant management software — which now generates more revenue from processing payments than from their (original) core business of charging for their software stack. Of course, Uber now issues debit cards to its drivers and offers short-term loans, as well. We will see many more of these examples.
What most concerns you about the banking or payments industry as it is today? What would you suggest needs to be done to address that?
One of the things we are seeing is that regulators in many parts of the world are having a hard time keeping pace with fintech innovation. Companies in this space want to be compliant and build solutions that respect local regulations, however, many of the laws in place nowadays have been written before the Internet was invented and need to be urgently updated to address inefficiencies.
How would you articulate how the concept of money has changed in recent times? Is it really a change? How is it still the same? Can you explain what you mean?
I don’t think that the concept of money as being a medium of exchange for goods has changed since it was invented. What has changed, however, is how we interact with it and how it became easier to use. While our ancestors had to carry around gold coins, we then transitioned to paper money and are now in an era where digital money is the main source of value exchange. Thanks to innovation in this space, it has become easier, cheaper, and faster to move money across borders and trade with it. The next step will be to make these systems more inclusive and accessible to the underbanked or unbanked populations.
Based on your vantage point as an insider in the finance industry, what innovations should we expect to see in banking in the short and medium term?
As I mentioned earlier, so many companies are now starting to offer financial or payment products and we will see that trend only pickup over the next few years. The buzz words here are ‘banking as a service’, ‘embedded payments’ or ‘embedded finance’, all of which really just mean that companies can now use solutions like Airwallex to easily add payment solutions into their offering without going through the complicated process of getting licensed and establishing banking relationships all over the world.
The areas where we see this most visibly at the moment are around wallet offerings where marketplaces allow their users to hold funds in an account and use it for future purchases, Bill Pay solutions making it easier for users of financial software to pay bills or collect payment for invoices, and providers of investment products enabling international users to access the US equity market. There are also a large number of products launched around Visa or MasterCard issuing so I expect many more branded card offerings to appear over the next few years. Ultimately, this should all lead to better user experiences when it comes to paying or getting paid and increased access to financial products by companies and individuals all around the world.
How has the pandemic changed the way banks interact and engage with their customers?
Like everywhere else, more services have transitioned online and digitalization has been accelerated. Banks have been forced to adapt and accelerate their digital strategy. Some have fared better than others.
In your particular experience, how has the pandemic changed the way you interact with, and engage your customers?
I joined Airwallex during the pandemic so I can’t really speak to what was done differently before the pandemic, however, I suspect that not much has changed as Airwallex has always been a digital-first company offering an online solution. In general, we have just all become more comfortable conducting even important business meetings online. On the enterprise or partnership side, what used to have been an in-person meeting is now a Zoom call, which ultimately makes our day-to-day more productive by cutting back unnecessary travel time. Having said that, I’m still a big proponent of having personal connections and am happy that we can slowly get together in person again. In fact, I have three office meetings this week which I’m very excited about!
In my work in the telecom space, I’m very interested in the importance of user experience. How much of your interactions have moved to digital such as chatbots, encrypted messaging apps, phone, or video calls? How has this shift impacted the user and customer experience? What challenges do these apps present when used as a customer engagement tool?
I do think that user experience is a key element of success and a very important factor to keep in mind, including (and maybe especially) when it comes to how we engage with our customers. Again, I don’t think that the pandemic has had drastic effects on Airwallex in particular as we have always paid close attention to customer experience, which was always delivered online via a number of tools. With regards to your second question, we don’t deploy chatbots or apps to accomplish this but directly interact with our clients, either by email or phone/Zoom. We also have shared Slack groups with some of our larger customers.
If you could design the perfect communication feature or system to help your business, what would it be?
The perfect communication feature would be a product that is so intuitive and easy to understand that customers can just use it without running into problems or questions. Short of that, any tool that gives agents more context about the question or reason why a customer may be reaching out is a win. Additionally, employees have to be empowered to solve their customer’s issues or at least to provide meaningful updates. There are a few very cool solutions being developed to accomplish this.
Fantastic. Here is the main question of our interview. What are your “5 Things You Need To Create A Highly Successful Career In The Modern Finance, Banking and Fintech industries?
This industry is constantly evolving and you really need to be willing and enjoy to constantly learn and keep up-to-date about new regulations, providers, and solutions in general.
As I said before, there are so many unknowns when building a fintech product and oftentimes you are faced with problems that have no clear or easy answer. Unless you’re a creative thinker it’ll be easy to get stuck and give up.
Many times the solution to a problem is obvious, you have the resources to solve it and are ready to get started, only to wait for regulators or lawmakers to give you the green light. There are many examples of projects getting delayed due to factors completely outside of our control. For example, post Brexit, we had to get a payments license in Europe in addition to our UK license, allowing us to serve EU-based customers. We expected that license to be granted well before the cutoff only for Covid to severely delay the process. This resulted in us having to offboard our existing EU customers even though we had been operating there successfully for quite some time. Thankfully, our license was since granted, and we now operate successfully in the EU region.
Here is another great life lesson quote: “Short cuts create the longest delays.” This is especially true in global fintech. While it might sound tempting to take shortcuts when launching new payment products, that usually backfires. This industry requires you to be detail-oriented and diligent in what you do or else you will fall off the wayside. I don’t want to point fingers here but there are plenty of companies who had to learn this lesson the hard way.
When dealing with people’s money and powering global payments or money movement, there will definitely be opportunities to make a quick buck by skirting the rules or looking the other way. In the best case, this will result in a slap on the wrist but there are plenty of examples where that can lead to losing suppliers, licenses, or even criminal charges. In the long-run companies that take integrity and compliance seriously will prevail as those are the ones building strong and resilient businesses.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
The last time we spoke I talked about the importance of making education more accessible. I still believe that is one of the world’s most pressing issues but I’m also inspired by how the global pandemic has accelerated the availability of online learning quite drastically. We should definitely keep that moving forward and not forget that there are many people in the world who still need access to and support for good educational resources.
Another movement I would like to see more of is fostering global financial inclusion. There are companies addressing this with blockchain technology but even traditional finance has evolved to the point where providing banking services to the unbanked or underbanked is now more achievable than ever. I’d like to see this accelerated and made easier, as well.
Thank you so much for the time you spent doing this interview. This was very inspirational, and we wish you continued success.
Thank you! Same to you, David.