By Pato Smith, Class of 2020
The first weekend of March, four first-year Boothies, Jon Law, Annie Pemberton, Eric Rauner, and Pato Smith, traveled to Denver to participate in the University of Denver’s International Race & Case Ethics Case Competition.
The team was drawn to this competition not only because no Booth team had competed before, but because of its uniqueness; the winner of the competition is decided by a breakdown of 90% case presentation, 10% ski race. The competition gave these four skiers not only the chance to test concepts they had learned in class, but also the opportunity to participate in an international ski race in the Colorado Rockies, a possibly once-in-a-lifetime opportunity.
This year’s case involved the future of Western Union’s pricing structure and data monetization with a focus on the ethics of these decisions. Western Union is the leader of the international money transfer market with millions of transfers each year. An important core customer is immigrants remitting money internationally to their families. Each team was challenged with creating an innovative solution that better suited the needs of these customers.
Bringing our research together, we realized that there were some very interesting consumer and competitor trends creating a dynamic market and that Western Union’s current pricing model of variable fee (based on locations, time urgency, mode of pickup, etc.) might not be the only solution for the company and its clients. Consumer trends included a rapid growing digital service (20% growth compared to flat retail growth), more customer transactions (3.5 times per month on average), and less principal being transmitted each transaction. To sum it up, more and more often, people are using their mobile devices to send smaller increments more frequently.
We envisioned an optional subscription service at the rate of 3 transactions to enable consumers to send unlimited transactions per month. This service would bring customer loyalty, something not common in the remittance market while helping customers transact in the way they wanted. This digital push would be supplemented by ad revenue from the mobile app and website. Most importantly, this model would be an ethical way to better serve customers and further WU’s slogan of “Connecting families around the world”.
We also recommended that Western Union use its expertise in compliance and regulatory services to offer Know Your Customer (KYC) services across the globe. This would entail verifying customer identities and conducting activity screening upon request from small businesses (landlords, shop owners). This would help facilitate business at a local level, which aligns with WU’s target customer base while not abusing the data WU has collected.
Apart from the presentation, it was important we dominated on the racetrack to secure our position. Because of our strong performance, we were able to keep our first place position, while the ski race outcome shuffled the 2nd, 3rd, and 4th place teams.
For our team, this was a unique experience to try something new. We were able to learn about a new industry, work on new fields in the project, present our recommendations to experienced executives from Western Union, and half the team competed in ski races for the very first time. We were proud to represent Booth both on the stage, slope, and podium. Our hope is for more Boothies to participate next year.