The success of Western Union’s digital platforms serves as proof that sometimes incumbents can challenge the challengers.
The narrative of digital transformation has often felt like new, innovative and agile participants rising to supplant older, slower, and cumbersome incumbents. However, through price reductions and new tech Western Union is fighting for postion.
Western Union (read our Western Union money transfer review here) has been the dominant name in overseas money transfers for over 150 years. However, in recent times they have found their position threatened by new names such as Wise (formerly known as TransferWise), Azimo, XE and others.
Powered by digital technology these money transfer fintech start-ups promise faster and more affordable transfers than traditional incumbents.
However, rather than flounder against this onslaught, Western Union has thrived. It has done so thanks to a unique blend of the old and the new.
The new comes in the form of digital innovation. Like other money transfer services, it benefited from a COVID inspired acceleration in digital platforms. Revenue from their digital transfer platform surged by 38% from $600 million in 2019 to $850 million in 202022. Their transaction site saw a leap of 30% in annual customers to 8.6 million.
The old comes from their position of trust – built by a century and a half’s track record. For all the benefits of fast digital transfers, people still want to use companies that they know and trust.
Many feel uncomfortable with online transfer services preferring instead a more traditional face to face approach.
Western Union’s approach, therefore, has been to take a highly practical attitude to innovation. At every turn, they have sought to understand how the pandemic has shifted what people need from a transfer service.
Speaking to TechCrunch their President of Product and platform Shelly Swanback explains more.
“One of the things we learned from that experience is this notion of everyday innovation,” she explained. “Innovation isn’t always blockchain or some emerging technology. Sometimes the best innovation is just about innovating every day with the products and services that you have.”
For example, with people confined to home they had to work out how to deliver cash to their homes in countries such as Sri Lanka, Nepal and Jordan which satisfied all security and regulatory requirements.
For those uncomfortable with digital platforms, they also introduced a video service in which they could connect directly with an advisor who could provide hands on support with their transfers.
Western Union’s success shows that, when it comes to digital innovation, older players aren’t necessarily the ones being left behind. By adapting to new technologies and deploying them in practical ways which help their customers, they are beating those agile start-ups at their own game.
Tom Cropper has been writing for us since 2015. Tom is a financial journalist and his work has appeared in titles such as the Guardian, Euromoney and many others.