Fintech Insider Podcast by 11:FS
00:36:59 · Kate Moody
[00:36:59] S0: Always a delight to have a Kiwi accent on the on the show. James, come to you first. Obviously, this is an area which, you know, a market that you know super well. How significant is this for consumers and businesses in New Zealand?
00:37:15 · James A. Brown
[00:37:15] S5: Yeah, I mean, back to Binu's comments. Love Binu, by the way. I've won Binu for an awful long time. Fabulous man. He's done great work, not only actually in the New Zealand market but also here in The UK. He spent some time actually consulting to both regulators actually during my tenure at Fintech Insider when we were actually part of the digital team during the free trade agreement discussions between both countries, because we were quite keen to get financial services into the mix because it's traditionally obviously no more about tariffs and sort of like produce. But back to your question, massive, you know, Binu talked about it there, the financial services sector absolutely completely dominated by the Australian banks in the main because they've actually sort of got the capital behind the big brother sitting across the pond. It's easy for them actually to deploy things actually a little bit more quickly than the likes of Kiwibank. Steve Jurkovich, my ex boss, when he was at ASB Bank, I think he had a bit of a vision and ASB was actually sort of, at least in the marketplace, seen as the sort of like the tech first bank. Quite honestly, after Steve left and a number of others, they sort of lost that. It's now the Bank of New Zealand, the BNZ that have got that. But the reality is that some people would look at this and go, but why would they want to go to a country with only 5,000,000 people? It doesn't actually make any sense. It makes sense because they can go in and they can disrupt, but they can also prove the model. I remember speaking to Matt, sort of the CEO sitting in Australia, and you know him saying, we've got plans to move into the New Zealand market. And a number of people around that table at that time were like, exactly that point, why? See, because we actually can come in and make a difference. It's taken them a little bit longer to get there but now they're there, the question I suppose I would be having of all the other CEOs around that table is how are we going to move, how quickly can we move and what are we going to do in order to actually protect our customers from migrating across because there's different ways to also consider this. A lot of people around the world tend to follow what the payments did.
00:39:27 · James A. Brown
So if your parents actually banked with Bank of New Zealand, you probably would have a Bank of New Zealand account at some point. But what we're seeing now, the reality is that you might have that account, but what are you using that account for? And actually then are you using your Revolut historically for your FX? Or now the opportunity to actually use it as a normal, let's call it a normal banking function. And that's the bit that always gets me is when you watch people in sort of the coffee shop or wherever it might be and, you know, they pay by if they still have a physical card or if they pay by phone, what's the app that they're actually using? And, you know, if you spot the accent and the accent's not necessarily local, you might go, actually, they're paying by Revolut or they're paying by Wise because it's easier to actually use that as an FX model. And that was the bit that sort of got me going back probably, what, ten years. There was this phraseology, at least in the APAC region, bundling, unbundling and re bundling of products and services where a lot of the big banks actually started, you know, sifting off the FX division, the insurance division, the wealth division because they started to realise they weren't actually very good at it. What I was surprised though is that they didn't then go out to the market and say, hey, Revolut wise or whoever it might be, you're really good at this, can we figure out a way to actually sort of like coexist? So if I was still in New Zealand, and I do hope to go back there early twenty twenty seven, I think I'd be very excited at this announcement and actually what the prospect will actually bring. The government, you know, when I used to sit with the Prime Minister, she was then just send her down, we need more competition in this landscape. Well, now you've actually got it. The question that's posed to follow-up is, now that they've gone in, will we see others go in? And then what would that actually look like? So the market's been screaming out for years, you know, they've been very dominated, it's been price heavy, which is not in the sort of in the favour of the consumer. Now that you've actually got a new digital first challenger in the marketplace, I think it's fabulous. Like, you know, throw in the grenade, stir it all up and and see what comes of it. So yeah, really excited.
00:41:46 · Kate Moody
[00:41:46] S0: Yeah. Wincie, if you look into your Fintech crystal ball for New Zealand, what impact do you think this will have from your experience of watching how new Fintechs deploy globally?
00:41:56 · Wincie Wong
[00:41:56] S4: So not to not to be the boring one, but I think people when they see a banking license, they're like, oh, this company is now authorized. It's a trustworthy company we can use. What they don't necessarily think about is the capital requirements, liquidity management, you know, resolution planning, all these things that you need to answer to a regulator in order to maintain and keep your license. And those are things that would slow any company down much, less someone who's trying to operate in 34 markets or whatever it is that Revolut is currently at. So, I think that'll be interesting to see. The model that they've clearly taken is about giving competitive savings product, for example. It is a playbook that we've seen, quite often for the likes of, for example, when Uber was first starting out, it would go to city to city, to try to take over a monopoly basically of that industry with incentives, so to speak, financing cars, etcetera, to get drivers, all all of that. And and this is kind of their small version. I don't necessarily think that Revolut is looking to get everyone to switch right away. I think they... Or I I don't know. I have no idea what they're thinking in their heads, by the way, but this is my conjecture. But what I think they're probably planning to do, which is similar to what happened, I think, in The UK, is to create an alternative, as James talked about, a competitor in a landscape that didn't have as much. And that hopefully people use it as a secondary account and maybe move to them in the next decade or so or over a long period of time. It takes a lot to push someone to switch. I mean, in The UK, have a switching scheme. And what it has proven is just how sticky people just are. People just cannot be deal or cannot be bothered with the paperwork required to switch from one provider to another, just because of the amount of forms and things that you need to do or fill in. So I think it's very smart. I think the world is becoming more global as everyone is more connected throughout the world. I certainly find myself paying for things in many different countries on a daily basis now. And having something like a global bank account that is truly a global bank account is extremely interesting and exciting because there aren't any of the major banks who have quite done that really well across the board.
00:44:36 · Wincie Wong, Kate Moody
Even, for example, HSBC, which marketed itself as the world's bank for a very long time, a couple of years ago, just closed up all their operations for retail banking in The US. So that just goes to show how hard a business it can be in different regions. So it'll be very, very interesting to see how Revolut continues as they continue to expand, not just in New Zealand, but other markets as well. [00:45:04] S0: Clive and Wincie, give you the final word on on this one. Mean, certainly from my perspective, it's just, yes, it's amazing for New Zealand, but it's like New Zealand, in addition to all of the other markets that they've got the