Fintech Insider Podcast by 11:FS
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
00:45:16 · Clive Summerfield
[00:45:16] S3: license in this year. Mean, what's your take? So yeah, they've industrialized the license application, haven't they? They've basically made that into their central business process and hoovering up all the markets that they can apply to and get into. And I think you're right, it's becoming a truly global bank, an online digital bank that's a global bank. And I think it's a very interesting move. There's a lot of overhead associated with it because as you probably appreciate, the regulations, reporting, the compliance, identity verification is all quite different in these various jurisdictions, but, you know, full marks to them for taking on a basically a global expansion strategy. And it's a... You know, I've I've lived in Australia for forty years, so I know what the Aussie banks are like. It's a good job. You know, they need a bit of competition over there and good on them for driving that competitive landscape. I think Commonwealth Bank, ANZ, NAB, and, Westpac have have added to, you know, far too long to alter themselves. And so it's good to see, particularly in New Zealand, which actually has a long heritage of adopting new technologies early. I mean, I have a very fond fond place for New Zealand because, in my previous company, its government, IRD, the New Zealand Tax Office, deployed, voice biometrics and got pretty much 80% of the adult population of New Zealand evolved in two years. On a per capita basis, it's orders of magnitude beyond what anyone else in the world has done. So they've... Yeah, best of luck to them is my, my comment to all of this,
00:47:19 · Kate Moody
[00:47:19] S0: and, well done. Well, kudos to Revolut, and yeah, just sounds like a general, general loving for New Zealand, full stop. So, we'll we'll keep our eyes peeled, you know, how what they actually do bring to market. But, yeah, to Wincie's point as well, like, how they keep on top of all of the stuff that happens behind the scenes to not just win the license but but keep the license as well. On that note, we're just gonna take a quick pause here. We're back shortly. Okay. Now for a quick look at a story that we don't have time to cover in full. This one's taken from FS Tech, and that is HSBC to establish Hong Kong AI Institute. HSBC has announced plans to establish a new global AI and emerging technology institute in Hong Kong as it looks to accelerate the adoption of emerging technologies across the bank. Set to open in early twenty twenty seven, the institute will focus on areas including AI powered fraud prevention, engineering efficiency, employee upskilling, and AI safety alongside technologies such as blockchain and post quantum cryptography. HSBC is partnering with the Hong Kong University of Science and Technology on the initiative bringing academic research and industry expertise together. This will be the bank's second dedicated AI hub following the launch of its global AI center of excellence in Singapore earlier this year. The announcement comes as HSBC continues to expand its AI strategy, having appointed its first chief AI officer in March, whilst also acknowledging that greater adoption of AI could lead to job losses. Obviously, like an intro, just by chance, this story obviously overlaps with quite a few of the other things we've touched on the show already, know, Wincie already alluded to some of the amazing developments we're seeing in AI in China. I think probably not a coincidence that they've moved Hong Kong, obviously in their statement they did cite, you know, the strong connections across the Chinese Mainland as one of the key drivers for locating this second institute here. We've also touched on the need for global banks and maybe HSBC maybe changing its interpretation of what it means to be to be a global bank. So, yeah, really interesting to see them taking this initiative, obviously getting ahead and staying ahead in this space, in the AI space is absolutely the name of the game as we look ahead to 2027.