Of all human tools and inventions, few are as essential, complicated and stigmatized as money. In particular, financial technologies and concepts have often spurred growth, investment and powerful advancements around the globe.
Maja Lapcevic brings a masterful understanding to the fintech space and these concepts. She is Senior Vice President, Mastercard Foundry Innovation Management & Marketing, where she leads Mastercard Lab’s Global Innovation Programs, the Mastercard Foundry Marketing team including Mastercard Experience Centers, and product portfolios for Data & Services as well as various dedicated innovation relationships. On a fundamental level, her work helps strengthen the trust, credibility and reliability that are essential to a thriving financial system, including helping government representatives learn about emerging technologies like crypto-currencies and NFTs, as well as working with startups globally to grow and scale their business.
Transcript: Maja Lapcevic
Chris Riback: Maja, thanks for joining. It’s great to see you.
Maja Lapcevic: Great to see you too, Chris.
Chris Riback: I’ve been looking forward to it. What is Mastercard’s approach to innovation? How would you describe it, the internal structure? How do you think about external investments or funding? Do you think about incubator activities?
Maja Lapcevic: Well, actually it’s a little bit of all of the above that you just mentioned. We are one of the first, I would say Fintech’s. We were established as a digital native company and we’ve been on this innovation journey since our inception. So our culture is really rooted in making sure that we are constantly discovering and looking and experimenting and ultimately, commercializing new products and services.
Chris Riback: You were digital before digital even existing.
Maja Lapcevic: I would say we were the first digital and then digital came to life and came at scale. I think for us, it’s really important. We had to recognize that as the times changed, we, as an organization, needed to have the right muscle and infrastructure to be able to change alongside the way different ecosystems and the world around us was changing. And so the way that we approach innovation is at first and foremost, it’s something that doesn’t live on the side, doesn’t live as an insulated bubble. It’s actually the job of everyone in the company to innovate and therefore one of the pillars of our innovation program is really focused on how we enable a Growth Operating System.
And so when we speak about Growth Operating System. We have to provide our talent with the right types of tools and platforms so that they can innovate, especially in this day and age where we’re also battling to attract talent. We know that we need to have cloud enabled agile environments that are best in class that developers and tech talent want to come to. And then lastly, we need to enable them with a way of working that is a best in class agile product development capability, so that we all have a common language, we all know what metrics to follow and we all work in a similar fashion with the ultimate goal of driving growth and delivering new products and services for our customers.
Chris Riback: And is that a Growth Operating System for Mastercard or for friends of Mastercard who take advantage of your innovation ecosystem?
Maja Lapcevic: So everyone benefits. Our customers benefit by the products and services that we’re able to put into market. In addition to that, one of the other pillars of our innovation capability is what we call customer engagement. Where if, for example, one of our customers would like to co-create with us or has a problem that they would like to solve and they think of us as a potentially good partner to solve it together with, we offer them innovation consultancy services, so that we can help them go through the typical innovation management life cycle. First and foremost, validating that problem exists, thinking through a solution and then iterating on how do we bring that solution to life them and pilot it for them as well.
Chris Riback: We all think of, at least at first glance, Mastercard as a payments company. Does everything surround payments, which is everything these days anyhow, or do you go far beyond payments?
Maja Lapcevic: Well definitely payments are a bread and butter on our core, but if you look at our revenue mix and where the company is going, nearly 40-some percent of our revenue is attributed to new services. So we think of ourselves as powering commerce and everything that’s required to power commerce. If you think about first and foremost, security and trust that we need to embed into the ecosystem so people have confidence to transact with counterparties that they don’t know around the world. We also are very active in providing value added services so that our customers are able to engage with their end customers and we provide them with a robust analytics data set to be able to do so as well.
So our data privacy policies are probably some of the most cutting edge in the world. We collaborate very closely with our existing customers, with policy makers, to make sure that privacy is top of mind and that we are embedding privacy by design, in the products that we create. And so as we enter spaces like open banking, we are innovating in that way so that we can provide value and control to the end consumer over their data and how their data is used. We’re also innovating a great deal in spaces like identity, which ultimately if we think of payments, they really are just smart transactions. And as we think about the world with emerging technologies, such as blockchain or distributed ledgers, we believe that an identity network is very aligned to already what we do and adjacent to what we do.
Chris Riback: Yes. How do I know who I’m transacting with in a world where anyone can be anyone and-
Maja Lapcevic: Exactly.
Chris Riback: Entities could be so easily hidden? So privacy, security, trust, identity, some of the key areas that you are just talking about and-
Maja Lapcevic: And also inclusion. Inclusion is a really important strategic pillar for us as a company.
Chris Riback: What do you mean by inclusion?
Maja Lapcevic: There’s a huge amount of the global population that is just left out of the financial fold. And as we develop more modern digital solutions that enable us to provide financial services to people that previously didn’t have a credit history or didn’t have access to financial institution who would offer them banking services, what we are doing is partnering with folks around the world, a lot in Africa and Latin America and Asia, where we are now able to provide them with an ability to access financial services. An example of that is something that we’ve partnered on in the Middle East, where what we’re doing is we have a mobile network operator where through the process of purchasing a phone, we’re able to unlock and lock a phone as a person pays their bill. And through this mechanism, in partnership with a mobile network operator, we’re creating a credit history, a financial history, so that now they can use this to get access to other capital.
Chris Riback: I’ve been reading a bit about that, not just with Mastercard, but also with various other brand Xs that of course we would never mention in this conversation.
Maja Lapcevic: Sure.
Chris Riback: But that concept of how do you help folks who don’t have an established credit history. What does credit history mean? What does trustworthiness mean? And redefining that. I’ve been reading about that. Yes, that’s an important trend. So let’s just say on that front, as well as on some of the other fronts that you were talking about, privacy, security, trust, identity, are these offensive opportunities? Are these defensive opportunities?
Maja Lapcevic: I mean, I think they’re a little bit of both. I was listening to a podcast actually yesterday where someone says that it takes years and many interactions for you to build trust, but you can lose trust in buckets in just a minute or a second. And so for us, making sure that we are enabling a healthy ecosystem is critical to any market that we enter. We’ve moved beyond just the consumer credit and debit world where we moved into B2B payments and government payments. And so for us, the role that we’re always striving for is how do we enable governance to enable these healthy ecosystems so that people have that fundamental trust, which is really imperative to any innovation, right?
So you’re only going to adopt things from people that you feel will be able to provide you a service and you know who to call if something goes wrong. And so when we enter a lot of emerging markets, a lot of the research we do when we’re testing our concepts and prototypes, we see that our brand stands out quite a bit for that brand preference. People feel a lot more safe when they see it associated with Mastercard behind it.
Chris Riback: Yes. So from that point of view, you have the privilege, the benefit of working for, with and in a really big company. The old definition of really big companies is they move so slowly and innovation means doing something that occurred 20 years ago in adjacent industry. That’s not what any real large company is today. But how do you think about advancing an entrepreneurial spirit within a global bureaucracy? I mean, it is necessarily bureaucratic.
Maja Lapcevic: Checks and balances are required. Absolutely, for large institutions, especially ones that are regulated. I think today, everyone has to invest in innovation because we’ve all proven, even coming out of this pandemic, that creating the backbone of a resilient company is imperative. And resilience can mean how do you enable your organization to survive once in a lifetime things like a pandemic. But ultimately as the world becomes much smaller, more integrated, there’s many more players that are considered as competitors to probably a company’s core business, it’s imperative to put in the right structure so that one, you’re always exposed to outside innovation. And that’s where I think what Mastercard has been really great at doing is creating programs where we innovate with Fintechs. We have a Start Path program that is focused on sourcing startups from around the world that are active in everything that has to do with commerce, everything from security, payments, loyalty, the whole gamut.
Chris Riback: Do you create an incubator for them or when they’ve bubbled to a certain level, you make a call and say, “Hey, how are you? We’d like to introduce ourselves. We’re Mastercard.”
Maja Lapcevic: No. Usually we’re not looking at very early stage companies because one of the things that we offer, typically we don’t require that we take an investment in them or anything. What we’re trying to do is enable them to grow by helping them not only be potential partners to Mastercard as a solution provider, but we also facilitate introductions to our own customers, so merchants, banks, government entities. And so for us, we’re looking for companies that are typically in the Series B, they have a product, they have some customers, they’ve found product market fit, they’re at that point where they’re looking to grow and scale, and we can provide them with the access, the due diligence, the global know-how of how to enter different markets and this powerful team that will help act as their front person to really help introduce them to large institutions around the world.
Chris Riback: Yes. Kind of a digital Sherpa.
Maja Lapcevic: Yes, exactly. Exactly.
Chris Riback: I mean, it is crazy. It’s almost impossible to read anything without seeing what feels like 17 new payments related or payments adjacent firms.
Maja Lapcevic: I know. The space has really exploded.
Chris Riback: Why do you think that is? I mean, it’s not the easiest space to enter. Do you think that is… Why is there such a market opportunity? Is there dissatisfaction among current customers? Is technology moving so fast that actually new opportunities are being created?
Maja Lapcevic: Well, I think Fintech and finance was, in general, ripe for innovation on many fronts. The first wave of innovation that we saw was really focused on how do we enable a better customer user experience. And so if you look at the startups in the first phase, they were really about how do we create more slick workflows, better user experiences, so that people can just get the job done that they wanted to. Now with other emerging technology that’s smarter and more efficient, whether we’re talking about blockchain and distributed ledgers, AI and machine learning, what we’re doing now is making financial services even smarter and more efficient, that goes to a complete digital transformation.
Because of financial institutions that have been dealing with legacy infrastructure, it’s harder for them. We’re living in a world where to be competitive, you need to be able to merge your data with a partner’s data to create a net new value or opportunity. And so that we’re seeing now is the backend innovation of financial services and that’s where you enter into the space of a lot of these crypto startups that are completely reinventing how value is exchanged and further democratizing people’s access and participation.
Chris Riback: Yes. That is for sure. What is Money 3.0?
Maja Lapcevic: Money 3.0, in my opinion, is really about us really converging into this new space of digital assets where anything can be tokenized and leveraging. In the past, digital was known for its ability to be super-efficient at distribution, but really crappy at protecting IP rights, and now we have with Money 3.0 and Web 3.0, the ability to create, value from digital assets, exchange them in a very efficient and responsible way because we will always know their history. It’s all tracked and traced on the blockchain and therefore, open up the world to completely new types of business models.
Chris Riback: And when you think about these assets, and I’m focusing on, that’s some of the words that you’re using, do you focus then solely on cryptocurrencies?
Maja Lapcevic: No.
Chris Riback: Are you thinking about NFTs?
Maja Lapcevic: Much broader, much broader. I think cryptocurrencies was the beginning to inspire us and they really came from, I would say, a lot of people’s disillusionment from today’s financial system. NFTs are demonstrating a use case of how now we could all participate in a different way, but ultimately it can really transform industries. And when I say transform industries, it can even mean tokenizing your house, finding ways for you as a person to take your education and for people to assess risk on you, based on how your education and your background has been, what the opportunity is for you in the future. So I see many different industries that are going to be able to transform because of this ability now to exchange value in a different way.
Chris Riback: And just you personally, what excites you about that? Does that lead to a better place for us?
Maja Lapcevic: I’m always excited about how we can enable a better future. And I believe that we’ve already seen a lot of benefits from technology that’s allowed the world to come together to express themselves. It’s not a panacea, if we look at even existing technology such as social media, but I believe the difference in what’s happening with Web 3.0 is that it’s fixing a lot of problems of the past. Being able to provide ownership rights to the people who created things right from the start, so IP creators, musicians, artists, everyone that has had a piece of something, should get some royalties or monetization back from it. And I believe that our ability to use emerging technologies now to collaborate together, to share data for a better good for all of us is also what really inspires me.
Chris Riback: Maja, tell me more, maybe as granularly as you can, about how Mastercard works with third party companies of varying sizes. I know there is Start Path. I know there is Accelerate. They have different names, but overall, what’s the process?
Maja Lapcevic: Sure. So the umbrella program is Mastercard FinTech. And so to your point, we work with startups from all around the world. Our Start Path award-winning program is really focused on sourcing startups that are involved with every aspect of commerce, including crypto. And the way that we work with them is by making sure that we understand what are the needs of our organization and what are the needs of our customers. And then we match those needs back to the solutions that these startups provide. For the Start Path program specifically, we run a selection process where once you’re selected to become part of one of our classes, then what we offer you is a fast track onboarding, due diligence process where you become part of the Mastercard family. And at that point is when our promise to the startup is helping the startup grow.
And so we are matchmaking them with internal business partners within Mastercard, in addition to our bank and merchant-government customers as well who are part of the program. We also have an Engage program that then helps work with those customers to help them actually embed the capabilities of a startup into a larger organization, so all of those pieces of the puzzle work together. And as well as our Mastercard Developers platform, which enables Mastercard to expose our own APIs into the world so that startups can co-create with us in a more agile fashion. All of those tools and building blocks are really there so that our customers can innovate with startups. They can innovate with Mastercard. We can all innovate together in a much more seamless way.
Chris Riback: And you have specifically not called it an incubator. Why not?
Maja Lapcevic: So it’s not an incubator because typically an incubator is a different program that we have where we work with different teams or cross Mastercard to identify a problem. With those teams then, we understand, based on the research and validation in the market that we do, we come up with a potential solution and we incubate that solution within our organization, what we call portfolios within the Foundry Organization that I’m a part of. And that’s where we take that very iterative process to bring a solution to market. That solution might be built from scratch with only our assets, but quite often we’re using a mixture of third party assets and our own to bring this new capability to life. So that’s the difference.
Chris Riback: Got it. I’m personally curious, what do you guys do to keep the pipeline flowing? Do you just sit with an embarrassment of riches and people are always reaching out to you?
Maja Lapcevic: No. First and foremost, we’re a network, so they know that our interest is about enabling the overall ecosystem. And that goes back to why I said many other programs require that they take an investment stake in order to participate. That’s not our end goal. Our end goal is to really drive the future of commerce and to make sure that our customers are innovating, we’re innovating, to make sure that we’re keeping up with the times. We have a Corp Dev team that’s always in the lookout for potential M&A opportunities. We collaborate very closely with them, so we know about what are the emerging kind of players, but from a sourcing perspective, our program has hundreds of ambassadors around the world that are regularly scouting, sourcing, meeting with startups and thinking about how do they tie back to our strategy and our customer strategy. And then that’s the funnel. That’s also how you activate your organization, by enabling many people to do that for you, instead of just a select few.
Chris Riback: You must do presentations to whether it’s CEOs or C-suite and various executives in different industries or sectors. What do you tell them? What are the things that you would be advising them to be thinking about and on the lookout for, as you think about this space?
Maja Lapcevic: We actually are, again, very fortunate to have invested in what we call Mastercard Experience Centers. So we have seven Mastercard physical Experience Centers where we bring partners, customers, media, investors in and we help them understand the breadth of what we do. And a large part of what we do during those spaces is not really talk about us. We talk about, depending on if we’re talking to the Homeland Security or we’re talking to someone from the president of a country, we might be talking about issues that are very relevant and important for them.
What we know today is whether you’re a public official, you’re a private sector CEO, you’re a student that’s aspiring to work somewhere, it’s really imperative to have one, first and foremost, digital literacy to understand what are the trends that are really moving the world. What are those systems level change that we all need to be paying attention to? Why? Because it’s all going to affect us in some way, shape or form, whether it’s a competitor that you don’t see that’s coming out of side view. And so really opening yourself up as a company or as an organization to outside in discovery and enabling your organization to be able then to act upon it in an agile way is really important for all of those stakeholders that I just mentioned.
Chris Riback: How threatened do you sense governments are by blockchain technology, by the DAOs, by the disaggregated ledger sheets, by currencies, just one example of what we’re talking about, being created outside of the realm of this state?
Maja Lapcevic: I’m actually quite proud of some of the public officials and the time they’ve taken to really learn about space, compared to 2011 when I first started getting involved in it. I think that back then it was looked upon as a threat. But I think that our public officials also see it now as a big opportunity to enable a more efficient financial system, to have a better understanding of anti-money laundering and fraud and how we could use these technologies to detect that and provide more security and health to the ecosystem. And we see that by just internationally, the amount of governments that are now experimenting with Stablecoins or central bank digital currencies, really trying to figure out a way what’s the best design to be able to offer those solutions to commercial banks and to end consumers. And we’re a partner with them, so we have CBDC Sandbox where we partner with central banks around the world, in helping them think through what is the right type of design, if they were going to actually issue one.
Chris Riback: And what about on the private sector side? What are the biggest concerns that you hear from C-suite executives?
Maja Lapcevic: A lot of the concern I think is just really the pace of change and how do they enable their organization to keep up with that change? I think that’s the biggest thing that keeps people up at night, given how fast everything is moving. We have technology such as 5G and quantum computing that are literally around the corner that are going to make what we think today is fast, just seem super slow. So I think now is the time to build that resilient company, to build the right processes and ways of working so that in the future, you can be open to and take advantage of those opportunities.
Chris Riback: Pace of change feels like a nice opportunity to segue to you personally, Maja.
Maja Lapcevic: Sure.
Chris Riback: You’ve experienced not a little bit of change in your own life. How in the heck did you get here to this point?
Maja Lapcevic: I was super fortunate actually with a lot of mentors, such as yourself, back at Citi. I spent a lot of time and was very fortunate to have roles, whether they were in consulting, the startup world, traveling internationally, I’ve always been a super curious person, and then ultimately when I landed in my first corporate innovation role at Citi as part of the corporate venture arm of Citi Group called Citi Ventures. And had a wonderful manager who exposed me to lots of learning opportunities and I think I just took the leap and really grew a lot. The one thing that’s beautiful about innovation is that you’re just continuously learning. There’s no one that is a true subject matter expert. And so as long as you recognize that, that’s the beauty of being in this space.
Chris Riback: And is there anything that you’ve seen? Is there a shiny, new object that you’re starting to think about?
Maja Lapcevic: I’m just starting to follow Amy Webb and her synthetic biology predictions, which are pretty insane.
Chris Riback: Yes. Those are something. I was just reading about those as well. Yes. Okay. Well, we’ll keep an eye on that. I’m trying to think what the Mastercard angle is with biology.
Maja Lapcevic: We are about enabling health, so we’ll see about biology in the future.
Chris Riback: There we go. Maja, thank you. A ton going on and you, and it sounds like Mastercard, are right in the middle of it. Thank you for your time.
Maja Lapcevic: It’s been wonderful. Wonderful to catch up. Thanks, Chris.