Alumni interview
Alumni interview:
Carl Clump (MBA 1980)
by Stephen Hoare
Carl Clump, Group Chairman of the payment card fraud prevention
company Retail Decisions (ReD), talks about how they have taken on
the cyber criminals to make online shopping safer for us all.
Leading the
Fight against
Cyber
Crime
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Management Focus | Autumn 2011
T
he millions of customer account
details stolen each year by
hackers is any company’s worst
nightmare, and highlights the challenges
posed to e-commerce, and the vital
role played by a publicity shy industry –
payment card fraud prevention.
Retail Decisions (ReD), Britain’s biggest
privately owned fraud prevention business
has, like the fraud it combats, global reach
with offices in the UK, USA, Australia,
South Africa and China and a business
spanning six continents.
Carl was appointed Group Chairman
of Retail Decisions in August 2011
after being CEO since 1998. In 2000 he
managed ReD’s de-merger from the ailing
conglomerate Card Clear. Eight years
later, to avoid a hostile takeover he took
the business private, negotiating a £186
million management buy-out supported
by private equity fund Palamon. Since
the company was formed, Carl has seen
the firm’s fortunes rise with turnover
building at 18% year-on-year and
operating profit showing a healthy 39%
growth, year-on-year.
Management Focus | Autumn 2011
27
Alumni interview
“I think the secret of
good management is to
be humble, to genuinely
listen and believe in your
colleagues.”
Carl attributes ReD’s success to a focus
on the core business of fraud prevention
and payment processing and a team
of highly motivated and dedicated
colleagues, who are well respected in the
world of payments. The results speak
for themselves. “Last year we screened
transactions from over 170 countries
around the world, securing over 19
billion transactions – some 10% of all
the card payments in the world,” says
Carl. “We’ve focused on organic growth,
finding new services that are coherent
and we’ve taken those services to new
geographies.” ReD’s expansion into
Australia was regarded as a springboard
into Asia and Carl eyes the China market
where e-commerce and credit cards are
still in their infancy, as a powerful future
driver of the business.
Last year in the United States, credit
card fraud cost banks and retailers
$48 billion. Worldwide, the figure is
many times greater. A highly organised
and sophisticated crime that crosses
international borders, card fraud is on
the rise as advancing technology presents
new opportunities for cyber criminals.
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Management Focus | Autumn 2011
Theft, card cloning and internet “phishing”
sites means ReD has to be constantly
developing technology to keep pace. “It is
impossible to be ahead of the fraudsters,
but we’re never more than half a step
behind them,” says Carl.
One of the company’s most successful
products is ReD Shield®, a real-time risk
assessment programme which compares
card details with a global database of lost,
stolen or cloned cards and searches for
patterns of card use which stand out
as suspicious.
The resulting decision to accept or reject
a customer’s credit card is flashed to
the online retailer in less than a second.
“Transactions come to us and we give a
response in 400 milliseconds,” says Carl
who explains that ReD’s risk assessment is
all about profiling transactions, not people.
Initially headhunted to sort out the issues
left by a departed management team by
Card Clear’s AIM listed advisor Credit
Lyonnais, Carl found a dysfunctional
business, a diverse and incoherent product
range, and worse.
“Within two months of joining Card Clear,
the only customer for our fraud prevention
business, the payments clearing operation
APACS, came to me and told me that the
development of Chip and PIN technology
would effectively make their operation
fraud proof. We had two years to find an
alternative income stream.”
This was the driver behind Card Clear’s
de-merger in 2000 which saw the business
go from a £60 million turnover operation
employing 350 staff to a much leaner
operation based on e-commerce with 40
staff and a turnover of £7 million. “We
made a conscious decision to switch the
business to card-not-present transactions
which are not protected by Chip and PIN.”
The growth in e-commerce and the need
for constant vigilance on telephone sales
or internet transactions paved the way for
ReD’s spectacular growth as the company
developed the technical solutions that
protect banks and retailers. As a provider
of outsourced technical solutions, ReD
is massively successful by any standard
with a client base that includes Walmart,
John Lewis, Air China, Louis Vuitton, Shell
and T-Mobile to name but a few. “We have
the world’s largest retailer, the UK’s biggest
retailer, the world’s largest airline, the biggest
oil company, the UK’s largest mobile phone
company. The list goes on and on,” says Carl.
The success rate for detecting and preventing
online fraud is surprisingly and consistently
high. “We get it right 99% of the time. That’s
well within the tolerance level of a retailer.”
Carl took the full-time Cranfield MBA in 1980
from an IT background: “I was a classic career
changer wanting to make the move into
general management.” He recalls the work
ethic at Cranfield as laying the foundations
for an energetic management style in which
leaders are encouraged to be entrepreneurs.
He and his fellow executives believe in taking
the temperature of the business by walking
the floor and seeking feedback. “I think
the secret of good management is to be
humble, to genuinely listen and believe in your
colleagues,” says Carl.
ReD enjoys a low staff turnover especially
among the technical experts who develop
the solutions on which his company’s
success depends.
“This is a young company,” says Carl. “Much
younger than me. Our hires tend to be smart,
streetwise and have a passion - individuals who
want to win.” There are no plans to downsize
– in fact, quite the opposite. “The best time
for hiring is in a recession. We do not do
downsizing. We just don’t do it,” adds Carl.
Carl is a firm advocate of MBAs for strategic
roles within the company and has hired many
MBAs to manage the firm’s global offices. He
has eight direct reports across his international
offices. A typical working day might involve
international travel and working across several
time zones.
So does he have any tips for Cranfield MBAs?
Carl points to his favourite management title,
a book called What Colour IsYour Parachute?:
A Practical Manual for Job-Hunters and Career
Changers by Richard M Bolles. “It says the real
opportunities for wealth creation happen in
small companies.”
Asked what he is proud of, Carl says the
success that ReD has achieved in the last
decade, all the great people in ReD, as well as
his family, who give him all the support
he needs.
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