ThoughtLab Featured

Visa: Reimagining ridership: Open-loop payments and the future of urban mobility

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Around the world, cities are taking decisive steps to help make their urban mobility ecosystems frictionless, sustainable, and inclusive. For many of them, implementing contactless, open-loop payment systems is a crucial part of this process. This paper presents results from a survey of 75 transit agencies and 3,000 transit riders from cities around the globe, and concludes that contactless, open-loop payments help to reduce carbon emissions and promote financial inclusion—among other important benefits.

Digital payment in transportation networks can be implemented on open-loop or closed-loop systems. Openloop payment systems use international standards and universal technology to enable payments at most transit providers. Closed-loop systems are limited to particular providers and usually apply specific standards and proprietary technology.

To understand the benefits of open-loop systems, the Visa Economic Empowerment Institute (VEEI) partnered with ThoughtLab, a global research firm, to survey 75 transit agencies and 3,000 transit riders from cities around the globe. Together, we found that transit systems offering contactless, open-loop payments provide widespread benefits to riders, agencies, and cities. Among other benefits, 80 percent of transit agencies in our survey that had already implemented these systems saw increased ridership following adoption. Agencies that had adopted open-loop payments less than two years ago saw an average total increase of 6 percent, while agencies with two or more years of experience saw an average increase of 10 percent. This paper explores the findings of our survey, and concludes that contactless, openloop payments help to reduce carbon emissions and promote financial inclusion.

Chicago, Illinois: Making mobility smarter, safer, and more equitable

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In June 2021, the Chicago Department of Transportation (CDOT) adopted a new strategic plan designed to revamp the city’s streetscape to address longstanding issues of equity. It offers an example of a future-ready approach to infrastructure and mobility—one that is smart, safe, and inclusive.

The opportunity to reimagine the CDOT’s strategy arose from the pandemic, economic, and racial justice crises of 2020, which increased receptivity to social change. According to CDOT Commissioner Gia Biagi, the new plan, developed in consultation with a coalition of community and activist groups, helps to move the city forward in tackling fundamental problems of generational poverty and structural inequity.

“In a city like Chicago, where past practices that negatively affected racial minorities are stitched into the landscape of streets and infrastructure, we need to begin unwinding this so we can become a more prosperous, equitable, and inclusive city going forward,” says Biagi. “Communities of color in Chicago often have the fewest transportation choices, the longest commutes, the highest concentration of industrial centers and truck traffic in their neighborhoods, and the worst pollution from cars and trucks.”

CDOT will look to make improvements in all the areas it oversees, which include Chicago’s roadways and bridges, sidewalks, bike lanes, traffic signals and signage, streetlights, the citywide bike share system, and policies focused on complete streets.

Much of the funding for the plan will come from a bond-supported  plan for infrastructure investment over five years, passed by the City Council in 2020. Some will come from a $188 million bond issue earmarked for environmental justice and climate investments.

Micro-mobility in focus

Micro-mobility as a key component CDOT’s future vision. Many of its  current initiatives center on bikes and bikeways. Since the pandemic began, it has built an extra 125 miles of bike lanes, many protected with concrete barriers. It also has expanded its bike share program, Divvy, to underprivileged neighborhoods, offering significantly discounted memberships to low-income residents. Divvy is one of the largest bike-share programs in the country, and now includes both electric bikes and scooters. Divvy is also the first US bikeshare system to incorporate ebike charging stations, according to Biagi.

The environmental bond issue also has enabled the city to give away 5,000 free bikes to qualified low-income recipients. “We have seen a huge response to the program,” says Mary Nicol, director of policy at CDOT. “We set a goal of distributing 5,000 bikes over four years, but we received over 19,000 applications in year one. We are looking to partner with bike brands and other companies to figure out how we can reach even more residents and provide them with a low-carbon way to get around the city, access jobs, and meet their basic needs.”

Biagi says that 60% of those who applied for a free bike are from areas that experience mobility hardship because of less access to public transportation. A bike may provide the last-mile mobility they need to easily travel to a job. “With partners at a nonprofit think tank, we created an index correlating mobility and economic hardship, and that has become a quantitative criterion for where to invest,” she says. “This has become a lens on everything, from which bridge project we’re going to do and where we will do additional work on repairs, to making sure our scooter program has an equity component that rebalances the system—every neighborhood in the city is getting scooters, not just downtown.”

New tech supports future vision

CDOT’s long-term plans include improving safety for all road users and rebuilding streets, sidewalks, and bus stops to create more walkable, livable neighborhoods. The department is exploring a variety of new technologies. For example, through the Chicago Smart Lighting Program, CDOT has replaced more than 270,000 outdated light fixtures with new energy-efficient LED lights that improve the quality of nighttime visibility throughout the city.

The agency also is piloting smart connected traffic signals that indicate to buses and other vehicles when a pedestrian is in a crosswalk and can control green lights and redirect traffic lanes when needed.

Another major sustainability initiative is expansion of the electric vehicle charging network, particularly in low-income areas. Biagi and Nicol point out that while, currently, most policymakers think of EVs as a technology chiefly within reach of higher-income people, this is changing. “Right now, EVs have been targeted to wealthier people, and the charging stations follow the cars,” says Biagi. “We are looking to ensure that we deliver those same opportunities to marginalized parts of our city.”

Nicol explains that in some neighborhoods that historically have not had reliable public transit, having a car to get around can be a necessity. “For those trips, we want to incentivize people to transition to electric vehicles where possible.”  Recent state funding for beneficial electrification, as well as tax incentives, will help.

As part of its EV framework, CDOT is reaching out to stakeholders in these communities to educate people about electric vehicles. It is also piloting curbside charging stations in some areas, working with community groups and the electric utility to find locations and setups most helpful for those living in multi-family dwellings.

CDOT’s vision for the future is one with no “red zones” of mobility hardship, and a wide range of sustainable transportation available to all, says Biagi. But an overarching goal is to make traveling along Chicago’s streets and public ways a pleasant experience.

“The question in making these investments is about the tolerance people have for a journey that might be a little slower, but is also safer,” Biagi says. “It’s all about their conception of time—if you feel like your journey is a positive one, and your destination as a positive place, that changes your perception, and you are willing to tolerate a longer time on that journey.”

Chengdu, China: Blending technology with nature to meet human needs

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Cities around the world are increasingly focused on adding green spaces to promote environmental sustainability and improve their citizens’ quality of life. But some cities like Chengdu, China are pushing their ambitions to a higher level by blending technology, economic development, and sustainability. ​

With its “park city” plan, Chengdu, a city of 20 million located in southwestern China, also wants to become world famous for being a city within a park, instead of building parks within the city.  ​

Chengdu sees its future as a metropolis that considers the natural environment in all aspects of life. Since its launch in 2018, its park city initiative has aimed to sustainably improve Chengdu’s urban layout, environmental protection, and industrial development. Rather than simply creating green spaces and parks in an urban setting, Chengdu intends to generate a new type of development model based on a balance between environmental sustainability and economic growth, while improving the living quality of residents.  ​

Fostering a greener economy​

To advance towards this goal, in 2019 the Chengdu municipality established the Bureau of Park City Construction and Management to lead planning of the initiative. Already, between parks, gardens, and other protected areas, green zones cover 43.5% of the city. ​

Yet while urban beautification is certainly a main objective of the park city initiative, another is to foster a greener economy. The plan is designed to strengthen innovation-driven green industries, develop a clean and efficient green resource system, revamp traditional industrial models for rural revitalization, and develop new business models based on the environment. For example, Chengdu developed the Tianfu Greenway, which spans 4,000 kilometers and is intended to eventually reach over 16,000 kilometers. The city has also advocated for low-carbon lifestyles and has built a green mobility network.  ​

Taking nature to brand-new cities ​

Chengdu is taking its vision for the future even further by developing a new satellite city. Like many metropolises in China, Chengdu is struggling with an overgrowth of population. To address this, government officials are investing in the creation of new cities, located next to large urban centers, that can welcome millions of people. The Chengdu Future Science and Technology City will be positioned as a hub for innovative international universities and companies to build a world-class sustainable science center.  ​

In February 2021, OMA, an international architectural firm, and Germany-based GMP Architects were selected as the winners of the Chengdu Future Science and Technology City Masterplan and Design competition. The plan is divided into three stages, with the initial stage expected to be completed in 2025 and full completion slated for 2050. The total area of the future science city is expected to reach 362 square kilometers.  ​

The new city will include five major academic centers: three major universities and two research spaces. Officials are accelerating the promotion of the city’s industrial development, and by the end of 2022, they estimate that they will have chalked up 62 projects with a total investment of 123.3 billion yuan. ​

Building around nature ​

A main goal of the Chengdu Future Science and Technology City is to create a city that doesn’t destroy natural spaces but is instead developed around it. The new city will be home to industry and technology centers as well as nature preserves to combine urban spaces with the pastoral beauty of the countryside. Located in a small rural zone near the Tianfu International Airport, Chengdu Future City will rise in the middle of a valley. Fully embodying the concept of a park city, digital plans show most of the buildings surrounded by green areas and rooftops with gardens. Architects also plan to build large park areas throughout the city.  ​

Another important goal is to make the city free of cars, to encourage sustainable mobility and public transportation. All buildings in the initial phase of construction will be accessible by foot within 10 minutes and a network of autonomous vehicles will connect residents to surrounding cities. Indeed, already in Chengdu citizens can ride in AI-enabled autonomous vehicles and buses, ordered via a mobile app. ​

Other new cities rising  ​

Chengdu Future City is not the first satellite city being developed next to large Chinese urban areas and will certainly not be the last. As the national government projects that over 1 billion people will be living in cities by 2035, China will have to continue to look for solutions to reduce the burden of rapid urbanization.  ​

In 2017, Chinese President Xi Jinping announced the creation of Xiong’an, a 38-square-kilometer area located to the southeast of Beijing. Much like Chengdu, the new city’s pillars are economic development, technology, and sustainability. Another example is in the province of Shenzhen, where Net City is being built. Focused on renewable energy, this urban center’s energy is entirely supplied by solar panels.  

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PwC: ESG Empowered Value Chains 2025

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ESG Champions embrace operational transformation. ESG is no longer a nicety; it’s a necessity. Customers demand it; investors require it; regulators are making it law. Still, most companies, while stating ambitious goals, have been slow to act. Transformation is costly and burdensome, and economic stresses are slowing efforts. But where many companies see challenges, some see opportunities.

Like with digitization – a period of massive transformation characterized by high costs and uncertainty – there are big benefits to transforming without delay. Companies that digitized early, learned from mistakes and moved forward. Those that waited, are now investing heavily to catch up. We think it’s better to be an ESG Champion than a follower.”

Stefan Schrauf, EMEA Operations Lead at PwC Germany

The PwC Global ESG in Operations Survey of mostly large corporations shows many leaders think the same. Appearing to be green isn’t enough. To be competitive, operations must be reengineered to meet wide-ranging ESG standards. There is a subset of ESG champions emerging that enjoys top management support, has a clear strategy and vision and balanced focus on all ESG aspects. They rethink the end to end value chain and with that made their business more resilient for the future challenges. Those who lag behind need to speed up their ESG transformation to not lose ground.

Broadridge: The Imperative to Improve the First Experience

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Create a customer-centric model that inspires prospects to sign on and stay on. 

The wealth management industry is in the midst of considerable disruption. User-friendly, online robo-advisors and self-service capabilities have increased the imperative for wealth managers to leverage technology to simplify and improve the client experience, especially for onboarding—the process of opening and funding accounts. 

However, too few firms automate tasks that should be digitally enabled and as a result, they run the risk of missing opportunities and falling behind. 

Onboarding is particularly important because it is the client’s first meaningful experience of the firm in action; but it is often hindered by confusing forms, a lack of transparency and a lengthy time to completion. Advisors say the process is too manual, has too many handoffs and is prone to frequently changing compliance requirements. Investors also complain that it’s an onerous, outdated and time-consuming process. 

Polling data reveals that the vast majority of firms have prioritized improving the onboarding process as top of their technology wish list. So, what makes a great onboarding platform? Investors want not only the simplicity and ease of low-cost automated investing (i.e. robo-advisor) offerings but also the “bells and whistles” of a full-service advisor. Wealth firms want a better client experience but, more crucially, want a process that funds accounts faster. 

Like many important technology-based decisions, executives must first answer the perennial question: Build or buy? This paper assesses those options and finds that a growing number of wealth managers are partnering with vendors to join shared onboarding platforms in order to upgrade their onboarding technology, benefit from a network of users and mutualize the cost of keeping up with regulatory changes. 

ThoughtLab’s research is referenced in this report. 

Broadridge: Tech Modernization

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What wealth managers need to accelerate (or risk falling behind)

As client demands, advisor expectations, the blurring of wealth verticals and competitive pressures increase in new and unexpected ways, wealth managers are compelled to analyze their business models and transform their ecosystems.

Compounding those challenges is the growing awareness among firms that their digital transformation is mandatory. Decision makers must prepare for what is next today to create new, scalable infrastructures as quickly as possible. Finding a way forward will require leveraging emerging technologies to address a multiplicity of hyper-personalized solutions to accommodate the marketplace needs of the rapidly changing investment landscape.

Tomorrow’s successes will be measured by the pace of a company’s technology modernization; the speed at which new ecosystems are developed to compete in today’s environment. Over the following pages, we will explore both the challenges faced and the strategic steps needed for developing successful tech modernization strategies.