How Can Technology Answer the Questions Still Unanswered in FinTech?

Leaders in the fintech industry joined us to discuss how technology can answer the remaining questions in fintech. They explored key technologies shaping the sector that could also have an impact on society as a whole. Join our panel moderated by Andrew Vorster (Innovation Catalyst) featuring Jacky Uys (Mambu), Chris Skinner (The Finanser and author), and Genevieve  Leveille (CEO & Founder of  AgriLedger), and Ritesh Jain (Fintech Founder & Advisor).

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Which are the unanswered questions in FinTech?

Andrew Vorster: Good evening, everybody. So, thank you very much for coming here. This is going to probably be the most irreverent panel you’ve heard for a while, and the reason is, that I’m going to run it a little bit differently from a normal panel. You see, when I was told about this panel, “How Can Technology Answer the Questions Still Unanswered in FinTech?” I incorrectly thought that I was going to be invited to sit on the panel. And I thought, “Well, this is going to be the quickest answer ever, and I was going to say, “It can’t.” And then, they went, “No. We want you to moderate the panel.” And I thought, “Oh, oh, this is going to be a lot tougher now.”

So how can I make my life easy? See, if you want the most efficient way to do something, give it to a lazy person. Well, I’m a lazy person. I always find shortcuts. So, I had a chat with these people, and I’m not letting them introduce themselves at all, because actually, they’re not representing their companies. They’re here because they’re really smart and they have opinions. So if you want to know who they are, I’m afraid you’re just going to have to have a look at the agenda because I’m not letting them talk about themselves at all. They’re going to be talking about the topic of how can technology answer the questions still unanswered in FinTech.

So I thought, the quickest way of me doing that was for them to tell me what the unanswered questions in FinTech are because I don’t know what they are and I’m too blooming lazy to try and figure them out. I’m going to play a bit of “Jeopardy!” Are you guys familiar with the way that “Jeopardy!” works, the game show? No? Oh, jeez, I was just checking that you were alive there.

It’s American, but we’ve seen a bit of pop culture and that kind of thing. So in “Jeopardy!” the host gives the answer and the guests have to give the question. And I went, “Oh, this is brilliant,” because we’ve all got all these FinTech trends and buzzwords flying around that Erlang has done a whole FinTech trends report. So I just opened that up and I went, “Buzzword, buzzword, buzzword, buzzword, buzzword.” I went, “Great. These are all the answers. What the hell are the questions?” What are the unanswered questions that they’re solving? What are these things doing?

So I thought, “Okay. I’m going to play some ‘Jeopardy!’ with the panel here.” So, they’re going to have to improvise because we haven’t got any technology to support this panel. So they haven’t got buzzers. The first thing they’re improvising on is they’re going to have to make a buzzer sound up to answer. That’s going to be the first thing. I said it’s going to be a little bit irreverent, right?

Andrew Vorster: So, Chris, obviously you’ve got an answer…oh, a question at least, right? What’s the question? What is the unanswered question in FinTech that blockchain is the answer for?

Chris Skinner: What’s been the biggest failure in technology?

Andrew Vorster: Okay. Do you wanna expand on that before I hand that to Genevieve Leveille because she’s challenging you…right?

Chris Skinner: It’s just that, how many live production mainstream systems on the blockchain are there out there? I don’t see that many. And yet everyone is buzzing saying there’s going to be loads by… well, 2020 they were saying. It’s now 2022 and there are still hardly any.

Andrew Vorster: So you can’t think of any valid use cases for blockchain then?

Chris Skinner: I can think of loads, but they’re nearly always involving governments and industries and financial institutions and corporates having to work together to agree on common standards, and they can’t agree on any standards. So the technology itself is a great idea, but it’s a solution looking for a problem that can be solved, and the problem can’t be solved because no one can agree on anything.

Andrew Vorster: Interesting. Genevieve Leveille, what’s your take

Genevieve Leveille: I think it’s because you’re asking for agreement rather than consensus. The challenge I would have is the technology, the way we implement technology is more about how much can you make from it, rather than how can I build it for the people who need to use it. And that has been the failure I would say right now, where we are building solutions, as you say, for problems that are not exactly the way people want. This technology is about collaboration. So unless you can collaborate, you might as well put it aside.

But also, I think that the other premise has been that this is about deseating people. “I’m going to get rid of the government, I’m going to get rid of banking, I’m going to rid, rid, rid,” when in reality, it’s about creating that responsibility, accountability, and consulting or informing. And until you start putting those things in, you’re not going to solve it with the technology. So agree and disagree.

Jacky Uys: My question is how secure is the data?

Andrew Vorster: How secure is the data?

Jacky Uys: Is it that secure in the block? 

Andrew Vorster: Interesting. And what’s your answer to that?

Jacky Uys: I think it’s not very secure. I think it’s the only value proposition for the blockchain. I think they’re making too much of the data, data sovereignty. But I think there’s a lot more to blockchain than just data. So for me, it is what you’re going to do with the data.

Genevieve Leveille: You can do a lot with the data.

Blockchain applied at AgriLedger

Andrew Vorster: And AgriLedger is actually…a little bit of an opportunity to plug what you guys do that…

Genevieve Leveille: I wasn’t going to…

Andrew Vorster: And I know you weren’t…

Andrew Vorster: Can you just expand to the audience about what you guys have been doing?

Genevieve Leveille: Sure. What we’ve been doing is we’ve started the process of really working with the smallholder farmers, those people who are at the bottom, in what I would call the first mile. So the question is why blockchain? Well, because if you were to put the information onto a central database, the person who’s going to take care of it is going to be either a government or a company, which means that they can modify things. So it’s about creating trust across the value chain. And this is not a supply chain. It is a value chain. And as things grow… this is why the data is important.

One of the things that you said, which is very much on my radar, is confidential computing. How do you now… Because what people don’t realize is when it goes from node to node, the security is no longer there, if the data is open, so we need to create those things. And I would suggest that there is an opportunity. We’re probably about three to five years. And to answer your question, 2020 to 2022 has been a write-off.

Chris Skinner: I know quite a lot of FinTech startups that started in 2020 and they’ve been doing very well. It’s not a write-off because we’ve all been Zooming and connecting. That’s not the same as meeting, but you can still develop blockchain solutions remotely.

Genevieve Leveille: We delivered it remotely because we couldn’t go to Haiti because there was a lockdown before 2019 was lockdown. So we delivered it by training people over Zoom.

Chris Skinner: I thought you said you couldn’t go to Hades, and I was thinking…

Genevieve Leveille: No, we couldn’t go. We couldn’t go.

Chris Skinner: No, you said Haiti. I thought you said Hades.

Genevieve Leveille: It was hell.

What is the unanswered question in FinTech that blockchain is the answer for?

Andrew Vorster: So what is the unanswered question in FinTech that blockchain is the answer for?

Jacky Uys: Inclusivity. 

Andrew Vorster: Inclusivity?

Jacky Uys: Yes, financial inclusivity.

Chris Skinner: And consensus.

Genevieve Leveille: Digital inclusion.

Andrew Vorster: Consensus?

Genevieve Leveille: Digital inclusion?

Chris Skinner: And provenance, proof.

Chris Skinner: We’re trying to keep you out of it.

Genevieve Leveille: He’s a GBA, you know.

Ritesh Jain: So inclusion I’ve got a question about it. When we say inclusion and digital inclusion, that’s far off, right? Because I don’t see the blockchain is going to solve the inclusion straight away, because that’s an infrastructure problem. And that’s not only in the infrastructure. Unfortunately, when we talk about inclusion, right, you need to consider not only the financial digital exclusion as a major issue. Let’s not get there in terms of financial inclusion across the world and cashless society and everything else, because that’s a fundamental infrastructure challenge, and more than the infrastructure, that’s a public policy challenge. So what blockchain can solve up to a certain extent, is through identity, right?

So the first thing that needs to be sorted out for inclusion is the identity, and then you move on with anything else.

Genevieve Leveille: I would suggest that my concern is until we look at privacy… So that’s where blockchain right now is not being built with privacy by design. So until we do privacy, I don’t want my digital identity. I might want my footprint to be evident, but I don’t want details about me on the chain.

Andrew Vorster: Let’s just come back to you before we go back to Chris. See, this is working there already.

Jacky Uys: Well, I think for me a great example was the first mouths to feed. Those are the guys that we generally don’t see. We don’t feed those mouths. First, we feed the top of the food chain to the bottom. And I like your approach. It’s bottom-up.

Genevieve Leveille: But the VCs don’t love it very much because I’m trying to break something.

Andrew Vorster: So, Chris, what were you saying about the inclusion?

Chris Skinner: Going back to why I commented on the biggest failure in technology recently, it’s because I just thought… Remember, so many headlines in conferences that I went to, 2015 to 2018 in particular, such as the United Nations in D.C. had a meeting all about identity in 2016 saying that they were going to start rolling out proof of work using blockchain technologies with Microsoft and Accenture for Sustainable Development Goal 16, which is 16.9 as a legal identity for everyone on Planet Earth. It didn’t happen.

Sierra Leone announced they were going to roll out blockchain for digital identity in 2019. It hasn’t happened. The Dubai government announced in 2016 that the whole of Dubai would run on blockchain by 2020. We haven’t seen anything about that.

So, there was all the buzz and the hype, and there’s still a lot of work taking place in the background like yours and others, but it’s just taking so much effort to push the thing uphill.

Genevieve Leveille: So, I think one of the challenges also is it costs a lot to do blockchain, and it’s much easier to continue with what isn’t blockchain. The only thing I take from the thing that will not be named is it pays for itself. So we need to start thinking differently about how things pay. So really, the product paying for itself will be the way of actually creating what is needed in terms of… And I think this is where I’ve sort of been saying what are we doing? FinTech. We talk about financial technology. We look more at the financial rather than the technology. So you’ve seen a lot going on in the blockchain space in terms of fin, so the Defi, all those things happening, but the tech, they haven’t taken care of making sure it was resilient.

Chris Skinner: And the core of that is not how to make the technology pay. It’s how do the people developing these technologies and implementing them make money out of it?

Andrew Vorster: Ritesh, your response was?

Different models for using blockchain/UPI?

Ritesh Jain: So the focus is around what I’ve seen. It’s quite a lot of concentration, right? From what we have seen, there are different models. So again, so I’m going into the broader spectrum. We have seen the U.S. model, the European model, and China, and now I talk about the Indian model as well. And when I’m saying the model, it’s about how you build the infrastructure and this tech in the country I’m referring to the digital public infrastructure. And one of the best examples that you could see is the UPI, right?

Andrew Vorster: Expand, just in case the audience isn’t aware of UPI.

Ritesh Jain: UPI is a unified payment interface. That’s a digital public infrastructure in India to enable payment, digital payments. What we are looking at, we are, as India, leading the world in terms of the number of digital transactions today. In the next couple of years, by 2025, 2026, the expectation is around going to a billion transactions a day.

So the whole idea is around don’t just get bogged down with the regulation. And unfortunately, that’s what I’ve seen across the various models. China’s very straightforward. Regulations, enforced. European, regulation, consensus. U.S., regulation driven by the public rather than privatization, right? The Gulf has the big techs. India, it’s a digital stack build-up, and the public-private partnership builds the product and services around it.

So we need to think and learn from the digital stack model and think from that perspective so that we don’t see the concentration in the market. And if you talk about the concentration over here, we know the Gulf has the big techs, or even in the U.K. for that matter, right? The credit card market is highly concentrated, 5 players own 92% of the market. Financial institutions are highly concentrated, and that’s why the evolution of FinTech or even open banking is important. 

Andrew Vorster: Technology can help to increase competition so long as the regulation and the infrastructure are determined centrally, or at least enforced, to be able to be open. Technology can solve an unanswered question in terms of how we can increase competition to be able to make it fairer access. Easier, quicker, faster? What’s the key? What’s the main benefit of the UPI in India?

Ritesh Jain: So the main benefit of the UPI is the digital payment adoption across the country, right? It has enforced digital inclusion as well as financial inclusion across the country. I will not talk about financial literacy, because that’s a separate challenge. We can talk about that.

Andrew Vorster: We’ll talk about that in a bit.

Ritesh Jain: So it has put India on a different stream in terms of growth. And it’s not only about the UPI. Today, if you look into…from a commerce perspective, e-commerce, the first thing that comes into mind is Amazon, right? Highly cash-liquid company. They can deploy their cash in any market and capture the market. Do we want to continue with that? So what do we do about it? How we can enable our MSMEs and the other merchants to play a part in the economy? You got to build a stack where everybody plays a part and becomes part of it and build an interoperable solution, so that MSME, whether it’s a big player or a small player, they can play around it so you can reduce the market concentration.

So the answer is, don’t wait for the regulation. Thank you for the privacy, right? We don’t need to just wait for privacy. Your infrastructure stack can enforce privacy. And I’m completely on to it, do not wait for the regulation. We have already seen that in the market-driven and the regulatory-driven, whether it’s open banking or the various other products, say buy now, pay later, for that matter.

What’s the unanswered question that buy now, pay later solves? 

Andrew Vorster: That was going to be one of my next buzzwords. So I’ll actually…I’m going to kick that one off because it is… So, buy now, pay later is the answer. What’s the question? What’s the unanswered question that buy now, pay later solves? And apologies to anybody in the audience who is BNPL, but I have got a bad reaction to…

Let’s give Jacky some air time here.

Jacky Uys: The question is can the economies do without retail credit?

Andrew Vorster: And the answer is BNPL. Do you think it’s a good thing or not?

Jacky Uys: Man, I’m going to be subjective. I’m sitting on the fence with this one because I believe, for a certain segment of the market, it’s fit for purpose. And I believe there’s another part of the market where it’s not fit for purpose, because regulation, we haven’t waited for that. So I’m a bit on the fence with that one. Do I consume it myself? I don’t have to. But I do believe there’s a big market out there that potentially could ease the burden in a short term. But I do also think…like, I’m very vocal about my opinion about the mortgage market in Amsterdam or the Netherlands. There’s a bubble and we just don’t know how big it is.

Andrew Vorster: And BNPL?

Jacky Uys: Is a bubble.

Andrew Vorster: You had also beeped for BNPL.

Ritesh Jain: So thank you. BNPL, it’s an interesting proposition, nothing new. We have seen that, been there in the past. It’s like tokenization, right? American Express came with the tokenization very early than its time. But then, Apple Pay came. BNPL was existing in the market, but technology and the channels have reduced the friction across the customer journey. It’s a great product, but, at the same time, it got to be controlled. If you have got access to the customer data at the BNPL, and if you can put friction in the checkout journey and let customers know what they are getting into. And if you can enforce controlled behavior, it’s a great product. Otherwise, we are seeing a debt-ridden society. We are going to see the payday loans.

How can technology help increase financial literacy?

Andrew Vorster: So I’m glad that you said let the customer know, add some friction in. And this won’t be a “Jeopardy!” this will be a straight-up question to you. One of the biggest problems that I see, and I do think that technology can help solve the problem, is financial literacy. People often think of financial literacy as something that’s a problem in other countries. That’s a problem somewhere else. That’s not a problem here where we are in the West, and, you know, we’re all financially literate. Bullshit. I can tell you that the vast majority of people in this country are not financially literate. They don’t understand the consequences of credit, credit cards, long-term, and short-term credit, or investing. Most of them wouldn’t even be able to construct a budget for their own lives, particularly factoring in paying off their credit card debt. And they all get into it. My worry about BNPL is not so much the BNPL, because I think an astute consumer would understand what it means.

But most consumers are not financially literate, and it does get worse when you go into other… So, I’m asking all of you here, and again, buzzers, how can technology help increase financial literacy?

Ritesh Jain: Beep, beep.

Andrew Vorster: You guys better are faster on your buzzers, otherwise, Ritesh Jain is having all the air time.

Ritesh Jain: Let me give you a bit of insight on the financial literacy in this market. We have done deep research in the market survey with a sampling of 18,000 in the U.K. Seventy-eight percent of credit card customers do not know when they make a minimum payment on the card, they incur higher interest rates, 78%.

Andrew Vorster: And that’s in the U.K.?

Ritesh Jain: That’s only in the U.K., and we are a developed country. Seventy-odd percent of people do not put direct debit onto their credit card for XYZ reason and they end up paying late payment charges. In this country, where the market is highly concentrated, 5 players own 92% of the credit card market, outstanding credit card debt was £70-odd bil before the pandemic, which has gone down to £56 bil now, thanks to the pandemic. We got better with the debt.

At the same time, between £5 billion and £6 billion people pay in late payment charges and the higher interest rates on the credit card in this country, 66 million credit cards out of 60 million population, so on average, we hold 2 credit cards per person, a massive challenge. And that’s why I precisely said, the buy now, pay later, it’s a great product. A credit card is one of the best products in financial history. It offers you 30 to 45 days of interest-free credit, but only if you use it the right way. Dynamic credit checks are a must. The credit card you have got a credit limit and you can keep swiping on. Your profile might change but your credit limit won’t. But buy now, pay later, you have got an opportunity to control that. What we need is the bureau data. Today we don’t have that. And likes of TransUnion, which they are forcing into getting all the data from the buy now, pay later companies so that they can do the dynamic checks and look into the credibility in real-time. That’s what is required.

Andrew Vorster: But that’s changing…that’s a transactional thing. My question is, how can we increase financial literacy, not stop their spending? I want to increase financial literacy. But you’ve had air time. I’m going to let Jacky respond to that…

At last, you’ve pressed your buzzer there, Chris.

Jacky Uys: Good point. It’s not… You’re in the U.K., right? But TransUnion in South Africa very much makes its bureau data available to its financial institutions there. And TransUnion led in South Africa in the whole affordability model check. And what they did with that affordability checking working out commit versus, what the income is that actually could give the consumer insights to say, “Listen, you’re completely overcommitted. Therefore, decline.” The client bank declined because this person has already 80% over-commitment, so they’re just living on credit. It’s a very interesting topic. But I do believe that in certain markets, the technology lags versus in others.

Chris Skinner: I want to widen it out because if the question is financial literacy, it’s not actually in the interest of financial providers for the customers to have financial literacy.

Andrew Vorster: So how can technology improve it? And it doesn’t have to be from a financial service provider. I said how can technology improve financial literacy.

Chris Skinner: I haven’t finished answering the first question yet, because you could take BNPL or payday loans, and they got shut down eventually by regulation in terms of payday loans. BNPL might get that too. There’s nothing wrong with the actual concept. But if you take it out further to loans, credits, and mortgages, overall, that’s how retail banks were making money. And I always remember being on a panel when the 2008 financial crisis hit, and one journalist on the panel said that the retail bankers became very much like drug dealers of credit. You’re pushing the customer further and further over the precipice until they can’t pull back, and that’s how you keep them under your thumb. And that, to me, is still part of the moral compass of banking that we haven’t addressed with regulations, which is if you give customers self-approved mortgages that they then can’t pay back, is that their fault or yours?

Genevieve Leveille: The answer is, that you make it feel like it’s their fault when they go and jump off a cliff. You need more, not just financial literacy, you need more financial oversight of how the drug pushers are making their money.

Andrew Vorster: I’m with you there. Genevieve.

Genevieve Leveille: So your question was how can we use technology for that?

Andrew Vorster: Yes.

Genevieve Leveille: I think that we can take the data, there’s plenty of data out there, to do the education. But we also need to make it a simple language, and sort of, like, explaining the consequences and gamifying it, I think, and that’s the part that… So as was well said, the banks don’t want that to happen. But there is an opportunity to do this. But then the problem is who’s going to make the money? You know, we always say, who’s going to make the money? And there’s no money to be made, only money taken away. So, therefore, you’re going to get killed before you start going at it.

Chris Skinner: But we have things like experience…talking about data, and I find it interesting that, and I made the comment during the last two days, that the people who have the least pay the most for financial services because that’s how you can keep people down. If you’re wealthy, you’re not bothered about credit and lending. If you’re poor, that’s how you live.

Genevieve Leveille: You’re right. But what happens is that let’s just say somebody came out of here and decided to build a technology which is going to…you know, we have the AI, machine learning, all those things to be able to create this, but that company will not survive.

Ritesh Jain: That’s precisely what I said. You’ve got to think from the digital public infrastructure and the digital public goods perspective. You have to think, otherwise, if you leave it to the private companies or the financial institution, it’s not in their interest.

Andrew Vorster: It’s not in their interest.

Ritesh Jain: So if you build the infrastructure, right, and let it run, and enforce the policies around it, and let’s build a public-private partnership, and that’s what the answer is going to be. So yes, technology can enable and help it, but if you think that you are going to build another private organization, which is going to run the financial literacy program across the country, who’s going to fund it?

Chris Skinner: I could see them do that in India, because of a very different structure of thinking and advancement of infrastructure. You wouldn’t see that in the U.K. or America or Europe.

Ritesh Jain: That’s the biggest challenge. Open banking was a great opportunity, right? It still is because it’s in the initial stages. We are eyeing open finance, which we are already seeing in the future. So it’s a great opportunity but we’ve got to think of it more from the infrastructure perspective than how we can enforce the regulations through the infrastructure. And when it comes down to literacy, right, it is not only a financial services challenge, and similarly with inclusion as well. So let’s be realistic. Whether it’s financial inclusion or financial literacy, that’s not only a financial institution’s problem.

Andrew Vorster: It’s a societal one.

Ritesh Jain: That’s a public policy challenge. So policymakers got to act on it.

Genevieve Leveille: So, do you see this as a role that should be taken by companies… organizations such as the World Bank, IMF? I mean, we’ve been giving them money for a long time.

Ritesh Jain: And they have been there for ages, but we haven’t seen enough action. So it got to be the country level.

Jacky Uys: Yes, I agree. I think the World Bank is far removed.

Ritesh Jain: It’s 50,000 level view. It doesn’t work.

Andrew Vorster: I’m going to throw in a little bit of a spanner in the works here because you guys are all saying it’s of no benefit to the financial institution to increase the financial literacy of people. And I’m going to lean on a fellow country person here, and, Jacky, I’m hoping you can jump in and give more of an example here. But in South Africa, Discovery Bank uses psychology and nudges to be able to change people’s behaviors, and they’ve been incredibly successful.

Jacky Uys: Agree. I worked for a competitor, Investec, and we kept our eye very close on Discovery because what Adrian Gore did, and he does it very well, is the psychology part of it. He uses data to drive that insight. He’s very clever because he started with a medical product, and then you’ve got the vitality, so incentivize you to keep the product.

Andrew Vorster: To get physically fitter.

Jacky Uys: Exactly. I’m still wearing this stepper, right? It’s psychologically for me now. Then, he started the insurance business. So he gets more of you…gets more insights of you. Then, while he was doing this, he was busy building his bank. It took him 10 years to build that bank. But now, with the nudging strategy, and I know because I’m a customer of this bank, he nudges you to invest. He’ll say, based on your vitality, status, if you’re on platinum or whatever, why don’t you invest R10,000, and I’m going to meet you at R10,000, this is an example. But that’s what he does with that nudging. I’m financially literate because I’m from a bank. I understand banking. So I put the R10,000 in, and he put the R10,000 in, so I got it. But that’s what he does with that data. The more he knows about the person, the more he builds on his psychology of it.

Andrew Vorster: And it builds their wealth. It doesn’t… So it’s actually of benefit to the bank. They’re not making their money from charging people the overdraft, they’re making their money because their customers are getting financially fitter. And I am very passionate about the fact that technology can help. But at the moment, the models of financial services are stuck. We’ve just spoken about this on the previous panel, legacy thinking, because legacy thinking is forcing them to think the only way that we can make money is from late fees and credit cards and that kind of thing, as opposed to thinking…Discovery Bank completely changed that.

Chris Skinner: So, it’s a coincidence that Adrian was one of the interviews in my brand new book, shameless plug, “Digital For Good.” But I interviewed him because I was looking for good examples of purpose-driven finance. And the whole group started just over…I think it was now 26 years ago, with Adrian saying, “The whole mantra and purpose of our bank is to build wealth through health.” And that’s a very simple statement, but putting that into practice is quite hard.

Now, when you take that further, what you see is all the designs of the products and services that began with insurance, now moving into banking, are all about building wealth through health, and taking that into vitality as over here. But what I realized as I went through the discussions with him, Monzo, and others, was that all of the newer companies, like, a 26-year-old financial group, that still has a strong founder with a strong vision, have those values very clearly in the whole way in which they think about their products and services and the people they hire and how they operate. And I can imagine… Take Barclays Bank Group, for example, when they started in 1697, showing how old they are, it was Quakers.

Andrew Vorster: You were around then, weren’t you?

Genevieve Leveille: He was.

Chris Skinner: Well, I was going to say I remember having that sort of mead with you back in the bar down there. They had those values when they started, I’m sure. Where are they now? And I know the values that Barclays claim to have, but equally, I know that it’s just corporate speak. There’s no passion.

Fintech for a greater good

Jacky Uys: There is a lot of watching going on.

Genevieve Leveille: Do you think though… I think the challenge I would have is what can be done in South Africa or can be done in India is much more agile in a way, and you can take people that way. Well, here, if Barclays were to turn around and start saying, “We’re doing it for the good of the customer,” everybody would look at them, and even the consumer would be like, “What’s wrong with you? What did you drink?” So I think that the idea of being able to learn and bring that in, and maybe this is where the FinTech company, so the young company, should be taking these value set. Right now there is no value set and it’s more about, “This is how I make money. This is how I’m going to make my money. And therefore, I copy what I have seen from before.”

Ritesh Jain: So what I could see in the finance world are we are going back to the values, and we have to regardless. Yes, it’s all about making money, but making money while building a sustainable business, and good for society, good for the people. And there is no other way around it due to sheer competition in the market. So the FinTechs are influencing large financial institutions to flex their muscles and build up at a pace the right products and compete, thanks to open banking as well.

So, what I see is that, yes, we are going to see a bit more sustainable products in the market, whether it’s by choice or by force because the customer is a bit more aware than what they were earlier. When it comes down to financial literacy, again, we need to set out the standard of what we mean by financial literacy. Have a bank account?

Unfortunately, recently, a couple of months back, I was sitting with the state head in one of the states in India. Eighty-nine percent of people have bank accounts or some sort of product, so the financial inclusion is 89%. But when it comes down to financial literacy, there was 24%. The ADB and the UNICEF and the World Bank and everybody was a representative. My only question was, could you please tell me and please explain to me how it works out? You’ve got financial inclusion, 89%, and literacy, 24%, and I bet from this stage, it’s no different in this country as well.

So we need to be clear that what are the standards. And when I asked the question, it was very simple for people to respond that if people have a bank account or a finance product, they’re included. And I said, what about the literacy? So there is no standard. So we need to set out…

Andrew Vorster: We don’t know what it means.

Jacky Uys: But this brings me back to the developed market and the emerging market. I think the emerging markets have no other option but to develop literacy because they’re forever having that image of emerging markets and questions that they have to solve. You know, Europe, and I’ll use Europe as an example, they have the luxury of having money. They have the luxury of the coffers being full. So they’re talking about central bank digital currencies. If I look at central bank digital currencies, the first thing that comes up for me that comes from an emerging market is control over overpopulation, control over spending, and control to make sure the economy’s doing well. It’s for me a very European thing, a very American thing. If you talk about the central bank digital currencies in South Africa, I don’t think it’s a topic that matters because other topics are far greater and more important,

Genevieve Leveille: Sorry, I was going to say but you are having central bank digital currency in the Caribbeans, and that’s taking off because that becomes for them an ability to remove themselves from the control of the U.S. dollar. You should be asking yourself…the distribution and liquidity availability is one of the challenges. So now you start using that ledger sort of a balance. There’s no real cash being moved around and the economy’s just floating.

Jacky Uys: It’s an interesting topic that you’re making. And I also used to have a compliance hat on. For me, that was controversial to see that happen because I’m thinking, what an opportunity to move money through the Caribbean now in the block unanswered. You don’t have to look at anything or anything like that, because it’s in a hidden environment, the movement of the money. So that is quite a controversial one for me. I’m a bit on the fence with that one. It’s more of a micro coffer.

Andrew Vorster: Sorry, Ritesh. You have a response.

Ritesh Jain: I was just referring to, a bit, on a test or different topic related to the banking in the FinTech itself, that yes, we are coming out of the universal banking business model. That’s what we have seen so far, and the banks are risk-averse and everything else, right?

Now, we are seeing that is changing slowly and gradually because of the FinTechs, because of technology, because of customer behavior, adoption, digital, blockchain, AI, ML, you can name it. So we are seeing that change. It will take time. But at the same time, the policymakers have got equal responsibility and more responsibility. When this change is coming in, it got to be right.

Genevieve Leveille: Beep. So can I show after I read what Chris should be talking about, which is the idea, because I read the piece the other day, that in the FinTech world, we’re not working early enough with the regulator? So that’s something that needs to happen. And you need to take that hat, either as Vitality did where I want to…these are the outcomes I want to have, or if I’m going to do a buy now, pay later, that I want to create the mechanism to where the regulator is not going to come in and knock at my door because people who shouldn’t have gotten the loans are there.

Jacky Uys: I’m very interested in what a VC would say to that, because of you…I think if a FinTech has to wait for a regulatory body, I think you remove the speed advantage of the actual industry itself. For me, I agree with the regulation. I think it’s something that you have to follow, with my compliance hat on, but I think there’s a speed advantage as well. But I think there’s a responsibility, and this is where I always look to a founder or a CEO as a human being, saying, “It’s okay that you are doing that product,” but it’s like you’re saying, it’s like, “Are you a drug pusher? Or are you for longevity and financial health? Are you contributing to a healthy society? Or are you contributing to your bottom line?” Because the founders do make a ton of money through the venture capital injections, so they don’t have the potential to make more, if I can put it that way.

Chris Skinner: The point I was making when I was writing about it is that the regulator is allowing and encouraging innovation to happen, which I think they should. But the question is, when do they need to step in and stop the innovation and start to regulate it? And there are many examples. China’s probably the best example of peer-to-peer lending, where over 5,000 companies had launched into the marketplace over 10 years. And finally, after 10 years, the People’s Republic stepped in and said, “Well, to do this, you must have these following rules,” and something like 4,900 peer-to-peer lenders collapsed overnight and everyone lost all their life savings and money. And now, we’ve seen the same in crypto. You know, trillions going into cryptocurrencies, the mega crash of cryptocurrencies, people lost their life savings. The answer is they shouldn’t have put their life savings into cryptocurrencies, but they didn’t have the literacy to know that. And the regulator allows those markets to run. When do they need to step in and stop the innovation?

Now, it was interesting because China very early tried to shut down cryptocurrency exchanges, but in Europe and America, it kind of wasn’t…I won’t say encouraged, but it was encouraged that they were regulated as exchanges. But by regulating them as exchanges, people therefore then thought…

Andrew Vorster: It legitimized them.

Chris Skinner: It legitimized them.

How do attract the right talent in FinTech?

Andrew Vorster: As opposed to China who shut them down then and has now launched a very successful CBDC trial, and that’s probably going to become a model for a lot of the rest of the world. I’m going to… the last thing before we wrap up. We’re nearly getting on there. One of the unanswered questions in FinTech that I see a lot of people struggling with is how the hell they attract the right talent, particularly when the talent that they’re competing for can go work for much sexier places like Google and Facebook and things like that? Who wants to work for a boring bank?

So can technology help attract the right talent in financial services? Or how can technology help attract the right talent in financial services? Or can it? Anybody for that?

Jacky Uys: Not everyone might share my sentiment, but I honestly do believe that the way you structure a deal as you would in a corporate and investment bank, where I’m from, you structure a deal with a human being. You don’t just put salary in front of them, you put shares. It looks like a structure. Structure a package that attracts them.

Andrew Vorster: No technology involved whatsoever?

Jacky Uys: No one retires with pats on the back and that’s the issue. It’s for me. I see that as the main issue.

Ritesh Jain: Precisely what we are seeing across the global market, and it’s a big challenge, the talent scarcity, whether it’s the U.K., European, Asian, anywhere, right? The full stack engineer, we used to say India outsourced quite a lot. The salary of the full stack engineer in India is top-notch. I’m talking about top-notch engineers, it could be as good as London, right? You land up paying quite a lot of money. But to attract the talent you got to structure the deal. But at the same time, from technology, you need to think more from an instant gratification perspective, from a consumer perspective. As a consumer, when we go to buy something, if you get a deal, or 5% off or something on the top, you’re happy.

So you have to think of your employee as a human first, then a resource you will be able to retain. It’s not only about the money. Not everybody… Yes, we got to pay the bills. People work for money, but money is not everything for everybody, right? So you got to build an environment where people can flourish, they can walk themselves into the work, where they can come and discuss openly and share ideas. And that’s the right culture you got to bring in to retain talent. There’s, I don’t think, any other way.

Chris Skinner: I’ve asked this question of quite a few banks, and their answers consistently seem to come back to the same things, which is that most rockstar developers want to feel they’re making a difference and that their work is meaningful and delivers change. And so, if you’re working in the right bank, where they’re leaning in agile and they have all these sorts of flattened organizations that allow small microservices architecture structures of teams working together to act autonomously and not in a, you know, restricted way, then they can see the change they make to code on a Friday has been used by their mom and dad or friends on a Monday, and they go, “All right. That’s making a difference.”

Developers can start to feel that their work is meaningful. And more than that, and JPMorgan Chase made this comment, is that if you were working for Google or Facebook, you’d be in Silicon Valley. That’s going to cost you a fortune in housing and other costs, whereas we’ll allow you to work anywhere across America. But if you want to work in Silicon Valley, we’ve got a campus there between Google and Facebook where you can be in that environment, because they’ve opened a large developers’ campus, which is experimental, so you can work on experimental new technologies and other ideas. And then, a comment that was made to me quite recently in the current meltdown in FinTech, and particularly in BNPL, for example, is that if you’ve got hundreds of people being laid off by the Klarnas of this world, who do you think is going to pick them up? The big banks.

Andrew Vorster: Genevieve , any last words on that one? Because we’re going to wrap up the panel on that.

Genevieve Leveille: I would just say the key is purpose. So it’s really how to bring in the three P’s, people, planet, and purpose. And that’s really where we’re seeing it. And I think when we start looking at Gen Z, this is what’s important. And in reality, that’s who we’re probably building for.

Andrew Vorster: All right. And on that note, please give my panel a round of applause. Thank you very much for your comments and insights. And with that, I think that we’ve got pizza and beverages, alcoholic and non-alcoholic, downstairs. Am I correct? I’m looking around for the organizers to signal yes. All good. Yes. And please carry on with the conversation with these people up here downstairs in a social environment. Thank you for your time tonight. Cheers.

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