Western Union CEO Hikmet Ersek on the power of human connection and how it is driving the company forward. By Brunswick’s Dave Carlson and Patrick Rutherford.
In 2010, Hikmet Ersek took the helm of Western Union, a company with a rich history of change and transformation. Founded 170 years ago, Western Union began as a domestic telegram service connecting the East Coast to the expanding western frontier of the United States and has since grown into one the world’s most recognizable brands.
Hikmet had risen through the ranks of Western Union, spearheading its international expansion. When he took the reins as CEO in 2010, more change was looming. The widespread adoption of digital and internet services beginning in the 1990s, and the rise of online payment companies like PayPal and more recently Venmo, Wise and others, seemed to spell an existential challenge for its cash-driven money-transfer business.
Under his leadership, the company has gone from strength to strength, showing a constant willingness to break with long-standing modes of operation and rapidly developing its digital services, all the while maintaining the resiliency of its core business. The company saw more than 80% growth in digital transactions year-on-year in 2020 and is on track to reach $1 billion in revenue in 2021 in its digital business alone.
Hikmet’s personal story is very much a part of his approach at Western Union. Born in Turkey to a Turkish father and an Austrian mother, he emigrated to Austria to study and begin his career. From his experiences, he developed a passion for supporting migrants and became a strong advocate for all the good that migration brings to the world.
The driving purpose of the company is connecting people, Ersek says, and the proof of that played out during the pandemic. When COVID hit, many industry analysts were predicting that a significant downturn in cross-border flows would negatively affect Western Union. Instead, migrants during the pandemic continued to send significant sums of money to their loved ones back home to support basic needs jeopardized by the crisis—things like shelter, medical supplies and food. As a result of its ongoing focus on services for the world’s migrant population, the company is emerging from the COVID-19 pandemic stronger than ever. And the future is bright, as that population grows increasingly affluent and tech savvy.
Hikmet sat down with Brunswick’s Dave Carlson and Patrick Rutherford to discuss his experience leading Western Union during these challenging times and his expectations for the future. Through it all, he returned again and again to the importance of focusing on the company’s global customer base, many of whom are immigrants opening opportunities for loved ones back home through cross-border money transfers.
Why did you join Western Union and how did you get your start with the company?
I joined because of my father.
It was 1999 and I was at GE in the Jack Welch era back when GE was the place to be. I was fortunate enough to be among those selected to go to their executive training program in Connecticut. So after this, I was contemplating what I would do next with GE and I got a call from my father in Turkey saying he needed money for some medicine. My father did well for himself but was living on a pension and this was very expensive medicine. I was living in Austria and had to figure out how I could send him some money from my Austrian bank account to his Turkish account. It ended up taking a week for the money to get through the correspondent banking network and it was a very expensive transaction. It cost about 140 Euros at the time and that was more than 20 years ago.
Shortly after that I got a call from a headhunter saying that Western Union was looking to expand in Europe. It was mainly operating in North and Central America at that time with about 50,000 locations and they were looking for an executive with deep international experience to help lead the expansion. At first I said, “No way I’m leaving GE.” But then I started thinking about my experience trying to send money to my father and how there must be millions of people who had the same struggle getting money to loved ones in other countries. The more I thought about it, the more I thought it was a compelling opportunity, to help Western Union create this global capability. So I joined the company and the rest is history.
Eventually I was able to send money to my dad in Turkey through Western Union and kept doing it for 16 years—and it cost a lot less than 140 euros every time!