►
Description
Moderated by Thom Kozik, Loyyal Corporation
This session will examine the true fundamentals of the Loyalty Marketing / Incentives industry from the inside, ranging from Travel & Hospitality, to Retail, to Wellness, the inherent roadblocks to blockchain adoption, and where the opportunities lie in overcoming those.
Ironically, the first true “digital currencies” -- loyalty programs, are behind the FinTech innovation curve of the past several years, and worse still - in a market where the the codebases of the largest programs are 30+ years old COBO.
These programs are their own economy: in the US alone, loyalty programs total 3.8B member accounts, and mint $12B worth of “currency” annually.
The large programs simply can’t throw away entrenched investments in platforms and proprietary technologies, which hold trillions of records of customer activity. The smart program operators recognize their brand value, and aren’t likely to turn over brand value to the latest cryptocurrency-based coalition model startup. Further, loyalty program operators rightfully are sceptical of public blockchains where KYC and AML are all but impossible.
Will the future of loyalty on blockchain be migratory, or an upheaval?
----
Hyperledger – Open Source Blockchain Technologies
Hyperledger is an open source community focused on developing a suite of stable frameworks, tools and libraries for enterprise-grade blockchain deployments.
It serves as a neutral home for various distributed ledger frameworks including Hyperledger Besu, Fabric, Sawtooth, Indy, as well as tools like Hyperledger Avalon, Cactus and libraries like Hyperledger Aries, Ursa. Learn more about Hyperledger projects: https://www.hyperledger.org/use
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#Hyperledger #HyperledgerGlobalForum2018 #Blockchain
A
So
we
want
to
talk
about
it.
Well,
T
is
a
very
common
use
case
when
we
start
looking
at
blockchain
applications
and
particularly
on
permissioned
private
Ledger's
like
fabric
the
there's,
a
lot
of
assumptions,
if
you
haven't
worked
in
the
loyalty
industry
that
people
make
simply
about
tracking
simply
the
transaction
in
a
dollar
amount
or
what
the
point
or
star
or
mile
is
that's
being
recorded
to
a
member
account.
Loyalty
is
actually
a
far
more
significant
and
multi-dimensional
application
area
beyond.
A
Just
simply
the
transacting
of
a
particular
award
mile
star
point
by
way
background
some
domain
expertise
in
this
area
prior
to
joining
royal.
At
the
beginning
of
this
year,
I've
been
on
the
board
there
for
a
while,
but
I
used
to
run
I'm
responsible,
partly
for
the
merger
of
merit,
rewards
and
I
would
prefer.
Guest
I
was
running
loyalty
at
Marriott
for
a
number
of
years
came
in
there
to
do
transformation.
We
decided
the
easiest
way
to
transformation
was
simply
by
Starwood.
A
Yes,
the
program
has
had
the
that
mergers
had
some
hiccups,
but
there's
a
lot
of
lessons
learned
from
how
to
merge
that
I
come
from
a
technology
industry
background
having
bought
and
ran
Atari
for
a
number
of
years
ran.
New
yahoo
games,
worked
at
Microsoft
parts
of
Windows
or
my
fault,
and
so
come
from
a
tech
industry
background
which
is
a
fun
domain,
to
bring
gather
it
together
with
loyalty.
When
we
talk
about
loyalty
at
large,
it's
important
to
remember
that.
Fundamentally,
it
is
the
intersection
of
economics
and
behavioral
psychology.
There.
A
We
think
about
loyalty
programs,
particularly
from
a
technology
perspective
again
about
that
ledger
about
that
database
about
that
loyalty
management
platform.
What
really
fundamentally
amounts
to,
though,
is
again
you're
doing
this
to
behave,
modify
an
individual
member
or
consumers
behavior,
and
that
behavior
modification
will
not
only
be,
and
we're
already
starting
to
see
this
with
AI
agents.
It's
not
only
but
on
the
part
of
the
behavior
of
an
individual
consumer,
but
it'll
be
on
the
part
of
other
systems
and
we're
starting
to
see
areas
in
this
domain.
A
With
some
of
the
autonomous
car
companies
that
we've
been
discussions
with
around,
how
will
you
provide
an
incentive
to
an
agent
that
is
a
nonhuman
agent,
acting
on
behalf,
perhaps
of
a
human
agent,
but
that
behavioral
psychology,
while
you
might
not
have
behavior
in
the
traditional
sense
of
the
non-human
agent?
There
still
is
a
behavior
trying
to
incentivize
and
provide
an
attachment
of
value
to
it.
A
Tracking
of
those
different
behaviors
and
the
discretionary
differences
in
value
is
what
a
chain
is
inherently
beautifully
designed
to
do
to
understand
the
scale
of
this
domain
and
the
challenge
here.
Loyalty
is
estimated
by
certain
analysts
and
I
think
the
number
is
actually
probably
a
little
bit
bigger
than
this
on
a
global
basis.
A
The
amount
of
value
locked
up
in
member
wallets,
whether
that's
a
Rakatan
loyalty
program
in
Japan
or
that
is
Lufthansa
miles
and
more
or
it
is
Marriott
Rewards
over
five
trillion
dollars
is
estimated
to
be
locked
up
in
member
wallets
and
currency
globally.
Now,
when
I
say
locked
up
many
members,
you
know
there's
some
amount
of
breakage
when
we
think
about
these
programs
from
an
accounting
standpoint.
A
How
much
of
that
funds
will
never
be
redeemed
on
the
part
of
a
member
who
just
accumulated
a
few
thousand
points
or
miles,
but
didn't
have
enough
to
redeem
for
something
of
value,
but
a
lot
of
programs?
Most
programs
don't
want
to
see
breakage,
and
you
want
to
see
areas
where
the
member
is
actually
utilizing
that
currency
in
engaging
with
the
program,
because
if
there
is
breakage
of
them
or
there
are
residual
value
sitting
there
and
a
member
wallet.
That
means
your
program
is
in
some
extent
failing
and
Jackie.
I
want
to
turn
to
you.
A
What
this
is
a
question
around
around
this
point?
How
do
from
a
Star
Alliance
perspective?
You
have
a
purview
over
all
the
different
airline
programs
from
the
28
member
Airlines
in
the
Alliance.
How
do
the
airlines
look
at
breakage
versus
utilization
or
Redemption
from
the
from
the
member
base?
I
think.
B
You
raised
a
good
point.
Well,
there
is
you
have
to
find
a
balance
as
the
FPS
if
you
can
fly
a
program
in
the
airline,
because
obviously
you've
got
this
liabilities
to
your
books.
However,
once
the
customer,
the
demise
of
the
custom
I
expire,
obviously
you
didn't
have
to
spend
any
amount
of
of
costs
for
for
an
airline
ticket
or
any
third
party
suppliers.
So
practically
the
cost
is
disappearing.
Yet
some
kind
of
profit
to
your
company,
so
practically
breakage,
is
not
always
a
bad
thing
ever.
This
is
not
the
reason
why
you
do.
B
We
have
a
loyalty
program
and
that's
not
how
you
keep
their
customers
loyal
to
your
company.
So
obviously
your
Redemption
opportunities
are
so
valuable,
I
think
there's
a
rough
percentage
of
I,
think
10
15
percent
of
customers
who
never
redeemed
them
outs
and
that
that's
not
because
they
don't
want
to
probably
they
want
to,
but
it's
just
too
complicated,
too
complex
to
find
ways
to
redeem
them,
and
actually
you
see
whenever
a
customer
redeems
mines
for
any
kind
of
product
the
value
increases
drastically.
So
the
money
that
the
customers
spend.
A
B
You
had
a
positive
experience
as
a
customer,
and
obviously
the
next
step
is
I
want
to
have
this
positive
feeling
again,
so
you
go
and
earn
my
right
points
whatever
again.
However,
I
think
you
get
to
it
later,
redeeming
things
and
miles
points.
However,
you
call
them
is
not
the
only
thing
how
to
keep
customers
law,
but
I.
Think
you
get
to
this.
You.
A
So
if
you
care,
if
you're
carrying
a
merit
awards
card,
there's
a
high
propensity
you're
carrying
you
were
carrying
Starwood
Card
you're,
also
carrying
the
Hilton
rewards
or
Hilton
Honors
card
or
IHG
card,
etc
and
I
knew.
If
you
redeemed
a
whole
bunch
of
your
points
for
that
wonderful
getaway
weekend.
A
My
the
likelihood
that
you
were
gonna
I
was
gonna,
get
your
next
day
diminished,
because
you
were
gonna,
go
pick
up
and
use
that
somewhere
else
you
were
gonna
now
go,
earn
more
on
Hilton
or
go
earn
more
in
another
hotel
chain
in
a
consortium
model
like
Star
Alliance.
Does
that
matter,
because
if
I
use
all
my
points
at
Lufthansa
well
as
long
as
I'm
still
flying
other
Star
Alliance
Airlines
is
it
is?
Is
it
a
its
importance,
I'm
sure
to
lift
honza,
but
is
it
from
an
alliance
standpoint?
B
Well,
that's
the
nature
of
our
business.
We
are
an
alliance.
We
have
28
Alliance
and
21
frequent
flyer
program,
so
it
means
we
are
there
to
work
together.
We
want
to
have
synergies.
We
want
to
drive
additional
revenue.
We
want
to
have
better
retention
capabilities
that
we
enable
for
our
customers
across
28
Airlines.
However,
in
the
end
we're
competitors,
not
we,
the
airlines
are
competitors.
So
we
somehow
need
to
find
a
balance
here
as
well
and
and
you're
fully
right
once
a
member
has
fully
cleared
their
balance
and
I'm
at
zero.
B
Why
would
I
start
again
collecting
all
my
miles
so
practically
that's
an
issue
that
we're
facing
when
we
say
we
want
to
enable
customers,
freedom
for
practically
everything
we
want
to
make
miles
of
currency
that
practically
enables
customers
to
pay
with
their
mats
for
everything,
and
it's
so
easy.
That
means
you
don't
even
need
to
collect.
I,
don't
know
seven
thousand
twenty
thousand
months
until
you
can
earn
something
you
can
redeem
them
for
a
benefit,
but
you
can
do
it
all
the
time
when
you
go
I,
don't
know
to
the
pharmacy.
B
A
It's
that
exchange
or
that
Redemption
component
is
important.
I
think
that
one
of
the
fallacies
that
is
perpetuated
within
the
technology
community,
particularly
around
blockchain
technologies,
is
that
I'm
always
amused
that
about
maybe
about
every
90
days
and
there's
some
press
release
from
some
startup
that
is
going
to
issue
the
uber
cryptocurrency
that
will
allow
consumers
to
Minh
animus
Leo
Bickle
dysley
exchange
their
currency
from
any
loyalty
program
to
some
other
loyalty
program.
A
As
long
as
everybody
adopts
that
crypto
I
always
amused
when
I
see
those
announcements,
because
all
it
means
is
that
the
person
or
the
entrepreneur
announcing
that
has
never
actually
worked
for
a
brand
or
has
ever
actually
talked
to
a
brand.
Because
to
your
point
you
know,
even
though
you're
all
part
of
the
all
the
28-member
are
part
of
the
same
alliance.
A
There
is
a
interchange
there.
Any
member
of
Star
Alliance
doesn't
want
ubiquitous
transfer
for
somebody
from
SkyTeam
or
one
world,
one
of
the
other
alliances
that
loyalty
programs
don't
want
ubiquitous
transfer.
They
want
liquidity
within
their
ecosystem,
but
not
ubiquitous
transfer
across
anything
and
everything.
A
There
is
some
of
what
you
were
talking
about.
I
always
appeals
to
this
quote
that
have
to
give
credit
to
our
friends
at
American
Express
on
this
one
that
I
always
loved
this,
that
that
insane
imbalance
that
we
have
in
business
between
acquiring
a
new
customer,
but
not
necessarily
paying
adequate
attention
to
retention
of
that
customer
and
loyalty
programs
are
kind
of
a
stopgap
measure
in
many
respects
to
make
up
for
that
retention
problem.
A
The
the
depth
of
that
is
often
overlooked,
though
again
managing
a
program
at
Marriott,
where
110
million
active
members
worldwide
a
92
year
old
hotel
company,
as
I
often
used
to
argue
with
our
some
of
our
other
senior
executives.
Marriott
was
a
software
company
that
thinks
it's
a
hotel
company,
because
once
the
hang
wants,
the
neon
sign
is
hung
on
the
building.
A
You
know
a
classic.
American
example
is,
you
know,
there's
very
few
brands
like
Apple,
where
people
will
camp
out
and
wait
for
your
product
because
they
just
want
the
image
of
having
your
product
very
few
brands
like
harley-davidson,
where
people
will
go
and
get
it
tattooed
on
their
skin.
That
is
a
feeling
that
is
not
a
transaction.
So
how
do
we
use
technologies
like
fabric
or
a
hyper
ledger?
There
frameworks
within
hyper
ledger
to
connect
those
dots?
How
do
we
connect
the
dots
from
an
identity
management
system
to
it?
A
So
again
in
summary,
royalty
is
actually
greater
than
rewards.
It's
not
simply
these
balances
of
points,
even
though,
and
the
greatest
challenge
that
I
could
say
from
my
experience
and
I
mentioned
years
on
this
as
well.
Jackie
most
loyalty
management
systems
they've
been
around
for
decades.
The
Marriot
software
quick
anecdote,
I
joined
Marriott
Rewards
when
it
was
back,
was
called,
not
honored
guests
that
yeah,
it
was
minor.
A
That
is
40
year
old
software,
because
most
of
those
legacy
management
vantage
systems
are
simply
fundamentally
a
database
with
a
name
and
a
balance.
There's
no
other
way
to
represent
everything
that
built
up
that
balance
and
what
that
consumer
sees
is
that
that
was
something
I
saw
in
the
hospitality
industry.
When
you
look
across
the
different
28
member
Airlines
of
Star
Alliance
is
I'm
sure,
there's
some
sort
of
more
sophisticated
in
others,
but
is
there
still
that
challenge
of
what
the
legacy
systems
can
and
cannot
represent?
I
might.
B
Say
is
even
worse,
because
I
think
many
of
you
remember
the
Paper
Tickets
that
you
had
when
flying
on
any
airline.
Let's
say
in
recent
years
now
we
have
like
a
couple
of
verses.
Later
we
have
boarding
passes,
we
have
mobile
apps,
we
don't
use
any
papers
practically
to
do
anything,
but
this
only
reflects
on
the
customer
side.
However,
what
happens
in
the
backend
system
is
still,
let's
call
them
legacy
systems.
They
are
super.
B
You
couldn't
imagine
what
they
look
like
so
practically
there
is
not
much
that
you
can
do
and
we
just
talked
before
and
when
I
said.
Yes,
we
are
considering
blockchain
for
for
many
of
our
new
projects
where
we
see
huge
problems.
Obviously-
and
this
might
finally
solve
this-
the
things
that
we're
seeing,
however,
with
the
current
projects
that
we
are
dealing
with,
where
we
think
they're
super
innovative,
is
exchanging
information
in
real
time
between
Airlines,
simple
information
such
such
as
customer
data
status
of
a
customer
between
the
airlines.
This
is
very
basic.
B
However,
I
hope
that
mostly,
we
see
ourselves
as
a
consultancy
at
style
lines,
because
there's
not
much
else
that
we
do
we're
consulting
our
28
Airlines,
getting
inspired
by
loyal,
for
example,
using
blockchain
for
for
the
problems
that
we're
facing
that
all
our
airlines
are
facing
and
trying
to
find
a
solution
that
fits
all
that
it
benefits
all
at
the
same
time,
so
I
think
working
even
within
the
airline
facing
all
those
challenges.
Every
single
day.
A
I,
have
to
say
one
of
for
the
amount
of
travel
I
get
to
do,
but
yet,
if
I
want
to
get
a
ticket
on
any
other,
Star
Alliance
airline.
More
often
than
not,
it
means
at
least
half
an
hour
on
the
phone
with
a
customer
service
agent
to
try
to
arrange
that
redeem
redemption
ticket
and
that
would
seem
to
be
a
hindrance
to
the
economy
within
the
Alliance.
That's.
B
One
of
the
examples,
because
just
give
you
some
background,
you
have
the
airline,
but
most
of
the
times
the
frequent
flyer
program
is
a
separate
company
that
means
they're
doing
business
together.
It
doesn't
mean
that
we
have
to
talk
inter
Alliance.
It
can
be
United
talking
to
manage
Plus
as
being
the
other
program.
So
that
means
there
are
two
different
systems
behind
at
least
two
different
systems
behind
it,
plus
the
reservation
system
to
issue
the
ticket.
B
That
means,
if
you
wanna
redeem
your
miles,
you're
talking
to
Mileage
Plus,
which
is
the
frequent
flyer
program,
but
you
want
to
buy
a
ticket
on
another
company
which
is
united,
owned
or
any
other
Star
Alliance
carrier.
That
means
we
somehow
needed
to
connect
our
system,
and
this
is
actually
state-of-the-art,
which
we
just
launched
this
year,
that
you
can
book
your
ticket
online
by
redeeming
miles.
B
So
it's
practically
the
first
step
towards
our
final
goal,
using
miles
as
a
currency
to
pay
for
any
product,
and
this
was
practically
first
step
because
before
that
you
had
to
call
the
call
center,
who
talked
to
another
call
center
agent
to
redeem
your
mouths
manually
from
the
system.
So
there
was
no
preemption
within.
A
A
I'll
be
the
qat
hope
later
on.
No,
we
got
such
nice
monument
group
I'm,
hoping
to
get
some
good
feedback
from
everyone
in
the
room.
I
know,
in
my
particular
case,
I
amassed
so
many
miles.
It's
not
about
having
the
miles
to
redemption.
I'm
redeeming
miles.
Unfortunately,
I
have
a
girlfriend
who
loves
to
travel
so
those
miles
don't
last,
in
my
account
long
but
I'm
more
interested
in
the
access.
A
A
One
to
you
know
another
gate
and
another
terminal
needs
to
be
tracked
somewhere
recorded
somewhere
and
it
can
it's
getting
lost
in
the
traditional
wealth
management
systems
and
I.
Think
that
that's
where
chain,
and
particularly
the
way
fabric
can
be
implanted
with
private
channels
holding
metadata
about
the
transaction
itself.
That
starts
to
show
some
pretty
interesting
implications,
because
access
is
important.
Well,.
B
Taking
this
example,
one
of
the
benefits
is
to
have
access
to
the
lounge.
Probably
so,
if
you
just
take
this
example
and
your
milage
Plus
member
and
you
visit
the
lounge
and
Frankfurt
from
from
Lufthansa,
we
are
Alliance.
That
means
we
have
contracts
amongst
each
other.
We
trust
each
other
a
lot,
because
this
is
all
about
trust.
United
will
pay
Lufthansa
that
you
visit
at
the
lounge,
so
a
lot
of
times,
I
need
ones
money
from
your
network,
but
currently
this
is
all
about
trust.
B
B
Visited
so
this
would
be
one
of
the
take
cases
where
and
I
think
this
is
the
thing
that
that
currently
always
comes
up
when
talking
about
blockchain
is
trust,
trust
with
partners
that
you
probably
don't
even
know
so.
The
benefit
here
is,
we
know
each
other,
but
still
there
might
be
better
ways
to
track
and,
and
you
yeah
to
find
a.
A
A
One
of
the
things
I
think
that
is
really
fascinating
about
loyalty
again
that
we
have
to
think
around.
How
do
we
start
tracking
these
things
on
a
chain
differently
than
we
may
have
in
the
past?
Is
around
identity?
I
mentioned
a
little
bit
briefly
ago.
We
don't
the
line
outside
an
Apple
store
the
night
before
a
new
phone
launch,
or
you
know
getting
harly
tattoos.
A
These
are
forms
of
identity
that
customers
have
taken
on
the
identity.
I
know
that,
for
example,
when
when
we
were
merging
this,
the
merit
rewards
and
the
Starwood
Preferred
Guest
Program
I
was
burned
in
effigy
on
the
front
lawn
almost
really,
because
the
people
were
very
concerned
about
losing
their
lifetime
status
and
the
reality
was
that
that
was
a
badge
of
honor
for
them.
They
had
no
way
to
really
show
that
to
anybody
else,
but
they
liked
knowing
and
they
liked.
A
Having
that
as
part
of
their
identity,
that
they
had
achieved
a
lifetime
status
at
a
certain
elite
level,
with
the
program's
interesting
anecdote
to
that
as
well,
many
of
you
may
or
may
not
know
that
you
know.
Marriott
International
owns
30
different
brands,
now
B,
even
after
the
Starwood
acquisition,
ritz-carlton
being
one
of
them,
the
ritz-carlton
team,
I
love
them.
One
of
my
favorite
brands.
A
I
stayed
heard
a
lot
of
their
hotels
over
the
years
even
before
I
joined
Marriott,
but
they
are
a
bunch
of
snobs
and
gotta
love
them
for
it,
because
it
makes
their
customer
service
what
it
is.
The
challenge
with
ritz-carlton
is
they
spit
up
their
own
program.
There
was
a
ritz-carlton
rewards
program,
pure
white
label
version
equated
to
the
merit
awards
program.
Other
aside
from
some
differences
in
the
benefits
when
you
stayed
at
a
ritz-carlton
versus
any
other
Marriott
brand,
and
we
had
a
tremendous
sign-up
rate
for
the
ritz-carlton
rewards
card.
A
But
like
every
modern
loyalty
program,
we
didn't
bother
issuing
you
a
plastic
card
until
you
attained
elite
status
because
you
get
so
many
millions
of
people
joining
these
programs.
So
you
hold
no
card
in
your
wallet
that
shows
you're
a
ritz-carlton
member,
and
yet
you
joined
at
ritz-carlton
program
and
when
you
looked
at
the
data
of
the
ritz-carlton
members,
less
than
30
percent
of
them
ever
ever
stayed
at
a
ritz-carlton
hotel.
So
let
me
get
this
straight.
You
joined
a
program,
never
staying
at
their
hotel
and
you
have
nothing
to
show
no
visible
outward
identity.
A
It's
not
like
you're
gonna,
walk
into
the
courtyard
and
throw
a
black
piece
of
plastic
down
on
the
counter
and
try
to
impress
Peggy
Sue
behind
the
counter
that
you're
a
ritz-carlton
member
and
hope
to
get
some
benefits
out
of
it.
People
were
joining
that
program
continue
to
do
so,
simply
because
of
they
see
themselves,
as
that
kind
of
customer
I
would
have
told
you
before
I
joined
Marriott.
A
That
I
saw
myself
as
a
W
customer,
even
though,
if
you
looked
at
my
profile
and
from
SPG
I
stayed
very
little
at
W
from
an
expense
standpoint.
I
work
with
a
lot
of
startups
and
you
can't
tell
the
guys
who
are
eating
top
rum
and
that
you're
gonna
stay
at
the
W,
while
they're
down
the
street
at
the
Days
Inn,
so
identity
comes
into
play
in
the
airlines
other
than
that
access
and
status
or
the
other
ways
that
identity
gets
manifested
in
the
members.
A
B
Practically
we've
got
the
the
frequent
flyer
programs
and
many
people
earn
their
miles,
obviously
when,
when
flying
on
certain
airlines,
because
they
don't
only
want
to
have
the
miles,
but
they
also
want
to
make
use
of
the
benefits.
Nonetheless,
there
are
a
bunch
of
non
air
partners
that
are
associated
to
it.
B
You
can
earn
your
mats
more
mats
when
you
go
to
the
next
petrol
station
when
you
stay
at
different
hotels
when,
when
you
go
and
do
online
shopping,
so
practically
earning
miles
credit
card
earnings,
for
example,
same
thing:
you
might
have
one
flight
a
year.
However,
you
see
yourself
as
a
frequent
traveler,
even
though
you
go
by
car
by
train
all
the
time,
but
you
have
a
frequent
flyer
card
and
your
mouths,
but
still
you
can
earn
your
maths
on
many
different
ways
to
you.
So
your
whole
every
night,
everyday
life
thing
right.
So
that's.
A
Actually,
one
of
the
areas
I
think
this
most
opportunistic
for
technologies
like
blockchain
to
apply
to
loyalty.
Is
that
again?
If
you
think
that
most
legacy
systems
today
simply
are
nothing
more
than
a
database
that
says
member
name
and
member
balance
with
no
additional
granularity
other
than
that
I
can
go
forensic
we
back
through
and
build
up
a
profile
with
that
member
does
or
have
done
historically,
but
is
not
traditionally
done,
and
a
lot
of
systems
in
a
chained
environment
I
can
find
looking
at
a
members.
A
Wallet
I
can
see
that
member
a
may
have
a
hundred
thousand
miles,
and
member
B
may
have
a
hundred
thousand
miles,
but
there's
a
fundamental
difference
in
the
nature
of
the
value
of
that
customer
because
of
how
they
earned
those
miles
if
they
earned
them
mostly
through
Cobra
and
credit
card,
spend
that
may
be
of
less
value
to
me
than
the
customer,
who
earned
them
more
through
actual
paid
seats.
And
although.
B
A
Talking
about
identity
little
bit
more
I've
got
this
graphic
up
of
a
young
girl
scout
with
the
with
the
sash
and
for
those
of
us
that
love
data.
The
thing
that
is
interesting
here
is
not
only
does
that
sash
and
I've
always
tried
to
use
this
as
an
analogy
when
looking
at
loyalty
models,
because
not
only
does
this
sash
represent
expression
of
identity.
These
are
the
things
that
I.
These
are
the
things
that
interested
me
but
think
about
a
little
deeply.
B
A
B
Also
add
a
lot
of
value
to
negotiations
that
you
have
with
partners,
because
if
you
would
say,
based
on
a
transaction,
I
see
that
my
customer,
usually
the
first
thing
that
he
does
is
booking
the
flight
when
going
on
a
travel,
because
usually
it's
the
most
expensive
part,
and
if
you
don't
get
that
you
don't
need
a
hotel.
So
practice
is
always
the
first
step.
So
you
can
have
negotiations
with
your
hotel
partners,
for
example,
saying
well.
B
A
One
of
the
things
I
know
that's
important
to
Star.
Alliance
is
historically
those
those
rates
of
exchange
between
either
multiple
Airlines
in
the
consortium
or
between
an
airline
and
a
hotel
company
or
a
rental
car
company.
Those
are
codified
in
a
legal
agreement.
They're
negotiated
and
negotiation
can
take
a
long
time,
but
do
those
change
do
those
fluctuate
over
time
or
is
it
you
know
renegotiated
over
a
period
they.
B
Do
change
mm-hmm,
it
strongly
depends
on
the
partner
we've
got
one
year
negotiations
up
to
five
years
ago.
She
ations
nonetheless
I
think
it's
very
crucial
when
you
consider
not
only
the
negotiation
part
but
also
setting
up
the
contracts,
and
we
discuss
a
lot.
The
smart
contract
solution
so
I
think
it's
very
essential
that
you
really
got
this
one
source
of
true.
B
Then
you
know
what's
going
on
and
it's
just
triggers
the
information
instantly
instead
of
having
all
those
rolling
approaches
with
reporting,
sending
the
reports
to
the
different
stakeholders
to
the
other
partners,
getting
them
approved,
sending
it
back,
sending
a
bill
getting
the
settlement
and
so
I
think
this
whole
process
until
you
really
receive
the
money,
sometimes
takes
up
to
two
months
until
you
really
got
the
money
on
the
account,
however,
I
mean
airlines
around
the
world
are
struggling.
We
all
know
that
and
I
think
margins
are
thin.
B
A
If
you
were
able
to
take
those
negotiated
rates
but
say
between
an
airline
and
a
rental
car
provider
and
and
codify
that
in
a
smart
contract
instead
is
there
there
may
be
the
desire.
How
realistic
is
it
then
to
start
looking
at
well?
The
rate
the
rate
of
exchange
is
at
one
value
for
a
certain
kind
of
behavior
or
a
certain
kind
of
customer,
but
it's
at
a
different
rate
for
a
different
kind
of
customer,
because
I
would
think
that
being
in
a
smart
contract
gives
you
the
dynamic
nature
that
you
could
then
do.
B
B
A
Direct
behavior
yeah
multiple
currencies
are
something
I
think
that
gets
lost
a
lot
in
loyalty
models.
Again,
if
you
think
about
the
legacy
nature
of
the
loyalty
systems
being
a
simple
name
and
balance,
there
isn't
a
lot
of
way
to
track
the
inherent
differences.
But
yet,
if
you
you're
all
here
in
Basel,
so
I'm
guessing
many
of
you
travel
a
lot.
A
If
you
think
about
how
most
loyalty
programs
are
architected
you
and
will
use
an
airline
example,
you
took
a
paid
seat,
you
took
a
fare
and
you
earn
miles
for
that
flight.
Well,
that
guess:
you're,
given
a
you're,
giving
your
miles
as
a
percentage
of
value
you
paid
for
the
ticket,
but
inherently
in
the
airline
that
has
one
margin
for
them
because
of
the
nature
of
the
the
miles
awarded.
You
were
given
some
bonus
miles
because
you're
an
elite
status
member,
well
those
have
a
different
underlying
cost
basis.
A
Oh
and
you
use
the
co-brand
credit
card
as
we've
talked
about
because
those
are
negotiated
with
a
third
party
credit
card
provider,
those
have
a
different
underlying
cost
basis
and
then
oh
wait.
You
happen
to
fly
during
a
promotional
period
where
you
got
some
bonus
points
because
you
flew
in
this
window.
Those
have
another
cost
basis
and
we'll
talk
about
this
a
little
bit
more
in
a
moment,
but
you
start
to
understand
the
picture
that
all
points
are
not
equal.
A
All
points
do
have
individual
underlying
value
differences,
and
that
can
be
something
that
the
chain
can
track.
You
have
achievements
in
the
business
today.
Where
customers,
you
may
identify
particular
segments,
you
target
them
with
a
promotion
say
if
you
fly
a
certain
number
of
times
or
if
you
stay
a
certain
number
of
times
you
get
these
bonus
points
and
that's
lost
a
lot
while
it
does
affect
the
behavior.
It's
a
very
simplistic
thing
that
doesn't
take
advantage
of
what
the
new
technologies,
such
as
putting
things
on
blockchain,
enable
us
to
do.
A
You
can
take
in
a
blockchain
model
the
same
achievement
model
of
identifying
this
segment
now
I
can
do
the
optimization
of
the
targeting,
based
on
the
aggregate
data
of
the
members
wallet.
One
example:
we've
used
a
lot
and
we've
talked
about
the
use
of
loyals
technology
to
extend
existing
loyalty
management
platforms.
Is
that
the
member,
the
behavior
as
represented
by
the
aggregate
number
of
transactions
or
set
of
transactions
in
that
member
wallet,
is
now
surfaced.
A
So
a
marketing
automation,
layer,
adobe
target
adobe
audience
instead
of
trying
to
simply
go
on
some
predefined
segmentation
that
that
member
falls
into
can
literally
look
at
that
members
wallet
and
say
is
this:
has
this
member
taken
this
behavior
or
done
this
action?
I'll
use
an
example
for
a
brand
product
a
product
discovery,
product
sampling,
product
trial
is
really
really
important.
You
want
your
consumers
to
try
new
things
to
see
new
new
offerings.
You
have
Marriott
launched
a
new
two
hotel
brand
just
a
handful
of
years
ago
called
moxie.
A
A
So,
looking
at
behaviors
and
trying
to
surface
them
up,
I
think
it's
something
the
chain
affords
us
the
ability
to
do
rule
dynamically,
the
justice
dynamically.
You
can
generate
different
objectives
and
then
say
well,
oh
in
order
to
earn
those
bonus
points.
I
need
you
to
take
this
combinatorial
set
of
behaviors
or
set
of
actions
as
a
consumer
very
difficult
to
do,
because
you
can't
track
them
across
the
different
partners.
A
I
could
say:
I
want
you
to
fly
a
Star
Alliance
carrier
at
least
twice
intro
introduced
us
via
your
social
network
and
postings
to
at
least
makes
at
least
five
social
posts
refer
us
to
three
different
members
and
have
two
dining
experiences
at
a
partner.
Restaurant
there's
no
way
in
a
lot
of
the
legacy
systems
today,
almost
impossible.
I
would
say
in
practical
terms
to
be
able
to
know
that
those
different
behaviors
occurred
across
those
different
domains
to
have
to
wire
up
Facebook
to
mileage,
plus,
to
know
that
I
made
five
postings
would
be
impossible.
A
Identified
that
same
customer
right
so
by
tracking
these
individual
engagements
and
behaviors
on
chain,
they
can
be
aggregated
and
surfaced
and
then
turned
into
a
different
kind
of
achievement
and
turned
into
a
different
kind
of
award
for
that
member.
So
again,
it's
really
something
fundamental
that
having
that
capability
to
tokenize
every
engagement
and
understand
what
the
what
those
tokens
represent
in
terms
of
a
member,
a
great
set
of
behavior
I
think
is
a
transformative
aspect
for
this
technology.
A
Liability
management
is
I'm,
an
economics
geek
of
sorts,
and
so
liability
management
becomes
an
interesting
area
as
well.
We
talked
earlier
about
the
five
point
two
trillion
dollars
locked
up
just
coincidentally,
the
the
amount
of
the
liability
that
Marriott
holds
is
five
little
over
five
billion
dollars
themselves
in
the
combined
liability
of
points
outstanding
held
by
members
across
their
programs.
A
Yet
what
a
chain
affords
us
the
ability
to
do
now
is
revenue
management
of
these
of
this
multi
trillion-dollar
liability
to
be
able
to
squeeze
out,
and
we
did
some
back
of
the
envelope
calculations
at
Marriott
that
to
be
able
to
squeeze
out
through
some
revenue
management
reliability.
We
were
looking
at
taking
down
anywhere
from
thirty
to
seventy
million
additional
per
year
now
on
a
five
plus
billion
dollar
liability.
A
That
doesn't
seem
like
a
lot,
but
I
can
tell
you
from
managing
my
departments
budget
if
I
had
an
extra
any
million
in
my
pocket
every
year.
That
gave
us
a
lot
of
latitude
to
do
some
interesting
things
so
now
in
a
chain
approach.
I
can
look
at
any
individual
member
wallet
and
see
again
that
distribution
of
their
points,
the
distribution
of
their
value
and
know
the
and
don't
know
how
to
redeem
out
of
there
for
the
having
a
really
great
quarter,
I
may
choose
to
burn
off
the
low
margin
points.
A
Another
area
that
I
think
chain
affords
us.
The
ability
to
do
differently
is
distributing
that
liability
in
general.
If,
if
you
were
to
look
at
the
fact
and
again,
going
back
to
a
hospitality
business
model
which
is
different
than
the
airlines
cuz,
the
airlines
own
the
planes
well,
at
least
they
lease
them,
but
they're
there
they're
the
airlines
planes
in
the
hospitality
industry
the
hotel
management
companies
be
at
Hilton,
Hyatt,
Hg
or
Marriott.
They
don't
own
the
hotels,
those
are
owned
by
real-estate
developers
and
so
they're
managed
by
the
management
company
on
their
behalf.
A
But
yet
the
management
company
takes
on
the
liability
of
all
those
points
that
are
awarded
when,
if
you
were
to
actually
read
these
20-year
management
contracts,
that
liability
is
legally
the
responsibility
of
the
gentlemen
or
the
company
or
the
real
estate
investment
trust
who
owns
that
building
and
in
most
cases,
most
of
those
hotels
over
6000.
In
the
Marriott
network,
you
have
large
swathes
of
hotels,
multiple
brands
owned
by
individual
development
companies,
and
so
you've
got
a
management
company
at
the
headquarters
level.
Carrying
this
massive
multi-billion
dollar
liability.
A
When
it
really
is
the
responsibility
of
all
those
individual
hotels
in
the
network,
then
you
get
the
disparity.
You've
got
a
central
business
district
hotel
for
those
of
you
that
are
familiar
with
North
America
I,
always
tease
this
one
as
being
the
the
Courtyard
in
downtown
Cleveland.
You
know
it's
five
nights
a
week,
four
nights
a
week.
A
Some
of
them
are
owned
collectively,
as
groups.
Others
are
individuals
that
the
central
business
district
one
generates
more
points
than
the
suburban
one.
Were
there
more
Redemption?
So
then
you
get
into
the
ability
to
have
wallets
at
the
property
level,
not
just
the
individual
member
level
and
let
the
individual
properties
exchange
value
between
themselves
and
the
headquarters
takes
a
takes
simply
a
fee
for
as
the
Fed.
If
you
will
in
that
regard,
the
Federal
Reserve
providing
that
enable
enabling
that
exchange.
A
So
you
actually
end
up
creating
because
of
the
existence
or
the
application
of
blockchain
technology.
To
this,
you
create
an
entirely
new
asset
class
that
never
existed
before,
that
real
estate
development
company
who
owns
the
Ritz,
Carlton
and
Grand
Cayman,
has
something
now
to
sell
to
other
hotel
operators
in
this
particular
specific
example
of
the
Courtyard
in
Cleveland
and
the
Ritz
Carlton
Grand
Cayman
they're,
both
owned
by
the
same
real
estate
developer.
So
now
you
can
imagine
a
scenario
that,
because
you've
tokenized
that
currency
they
can
choose
to
keep
it
in
the
family.
A
They
can
see
that
you're
coming.
You
know,
you're
staying
in
Cleveland,
you're
staying
at
other
hotels,
it's
white
lodging
is
the
real
estate
development
group
and
white
lodging
can
say
when
you
pop
up
that
reservation,
page
and
you're.
Looking
for
your
next
day,
they
could
say:
hey!
You
know
if
you
want
to
redeem
those
points,
if
you
redeem
them
here,
you'll
get
more
free
money.
A
I'll
give
you
a
15%
bonus
on
your
redemption,
because
I
know
that
you're
keeping
the
points
in
my
family
versus
having
to
go
back
through
this
headquarters,
Bank
that
doesn't
really
exist.
So
by
tokenizing
the
currencies.
It
really
does
enable
an
entirely
new
asset
class
that
never
existed
in
a
franchise
pool
before
I
know
that
doesn't
apply
directly
to
Airlines.
But
I
would
imagine,
there's
some
value
in
interchanging
between
the
carriers.
A
B
The
key
aspects
that
we're
targeting
is
a
cruel
instantly
your
miles.
Whenever
you
touched
ground
with
the
airplane,
you
should
have
your
mats
on
your
counter
and
get
a
notification
and
be
able
to
redeem
them
for
any
product
that
you
want.
I
think
there
we
still
need
to
find
a
balance.
Do
we
want
customers
to
redeem
for
anything
going
to
the
pharmacy
going
to
the
bakery,
or
do
we
want
to
keep
them
within
our
airline
business?
B
However,
as
I
mentioned
before
it's
a
it's,
a
very
innovative
product
or
technology
behind
it
and
I'm
not
sure
to
what
extent,
carriers
on
different
levels
are
already
ready
for
it,
especially
when
it
comes
to
the
royalty
industry,
because
the
infrastructure
is
heavy,
data
are
very
important
and
actually
data
is
the
the
key
for
loyalty.
There
is
nothing
else
behind
it
and
moving
all
of
those
things
to
a
different
technology
is
challenging.
However,
I
do
see
this
in
the
future,
maybe
not
next
year,
but
in
the
next
three
four
five
definitely
Thank.