← Fintech Insider Podcast by 11:FS
Fintech Insider Podcast by 11:FS
1011. News: Starling fights fraud with AI, Uber goes global with Checkout and Citi and Coinbase collaborate
01:06:17
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- [00:14]
A
Hello and welcome to episode 1011 of FinTech Insider, brought to you by Eleven FS, the five time consultancy of the year that worked with banks, investment firms, digital banks and fintechs to build the next generation of financial services. I'm Ross Gallagher, head of consulting here at 11Fs. Now they say what happens in Vegas stays in Vegas, but I think when it comes to fintech, maybe not so much this week. Money20 20 North America took over the city of sin and there were plenty of big winners in fintech. And no, we're not talking about those lucky few at the slot machines. Helping me soar the reds from the blacks this week is our panel of fintech experts. So let's meet them. First up, a very warm FinTech insider welcome to Bill Kennedy, interim CEO and CFO at Galileo. Bill, welcome to the show. Great to have you here. I know we'll be hearing a little bit more about some of the latest news from Galileo shortly, but maybe in the meantime you can just tell us a little bit more about your role as interim CEO and cfo.
- [01:16]
B
Yeah. Thank you, Ross. Great to be here. You know, it's been a whirlwind since I've been named interim, as you can imagine. But consistency is key and certainly more than willing to step into that role and provide that. And so, you know, that has expanded my role to do things such as this from what I would normally do as the cfo. But very excited to be here. I know we've got a lot of topics to get into and I'm happy to look forward to talking about them.
- [01:45]
A
Excellent. We do, and we appreciate you coming on and sharing your insights and perspectives, Bill. Thank you. Next up, we have a FinTech Insider return for Rory O'. Neill. CMO checkout.com Rory, again, welcome to the show. Welcome back. You've been, you've been at Money 2020 Vegas this week. How, how's that been for you?
- [02:06]
C
That was great. Look, it's always, you know, checkout is a digital payments player. So Getting to Money 2020 means we can connect with merchants and partners and the whole of the ecosystem. And you know, I'm sure we'll get into Ross, like, you know, the whole show was talking about AI and agentic commerce. Right. So even out, you know, even drowned out stablecoin, you know, it was a hot topic at the show this year for sure.
- [02:27]
A
Yeah, quite the achievement. And yeah, you're right, I think it's going to be a recurring theme as we move through the show as well. So great to have you. Rory, thanks for coming on. And last but certainly not least, another fintech insider return for Mei Lim, Managing Partner at Anthemus. Mei, thank you again for coming back. It's great to have you. What have you been up to since we last spoke?
- [02:50]
D
Hey Ross, lovely to be back. So last time I was here we were announcing the launch of Common AI. Just as a recap, Common AI is trying to level the playing field for new startups coming in into the AI arena. And we're trying to level the playing field by offering up shared resources that are stuff that these startups need in common to build their products. And that is a mixture of we're providing, providing foundational IP data libraries, know how, but more importantly also access to cheaper compute. The other pillar alongside that is the funds. Anthemis is an early stage fund and we will also be able to provide capital, much needed financial capital to these startups as well as the venture building capability as they scale up and hopefully go global. So we've been busy growing that. We've come out of stealth. We've been speaking to interested members, but also investors and it's been great.
- [03:58]
A
Yeah, amazing. I mean, such an incredible set of tools and really sort of empowering the ecosystem there as well. So that's very cool. You must be very proud. Look, I mean, that's our fantastic panel. As Bill said, we've got a lot to get through so we I guess, better dive right in. Our first story comes from Finextra with a headline, Starling launches AI tool for Scam Monitoring. So Starling bank has unveiled what it calls Scam Intelligence, an AI driven tool designed to help customers identify potential purchase scams. Users can upload images or advertisements from online marketplaces, which the tool analyzes for signs of fraud, providing personalized guidance within seconds. The development of Scam Intelligence was a collaborative effort with Google Cloud, leveraging their experience in AI and machine learning. The tool is available to personal, joint and business account holders, aiming to combat the growing issue of financial fraud, which resulted in over 1.17 billion pounds in losses for UK consumers in 2024. Now, to describe this new tool in more detail, we have a voice note from Bernadette Smith, Chief Compliance Officer at Starling, who headed up the launch of the tool.
- [05:15]
E
This is a first of its kind for the uk, allowing customers to upload images of online ads to the Starling app. Before using Scam Intelligence to monitor for the signs of a scam, it might detect things like the price is too good to be true or that the image is a Bit too grainy or that the seller is using pressure tactics. It's been trained on thousands of scam ads that our customers have shared with us over the years. Our goal for scam intelligence is twofold. To protect our customers from scams and to give them the knowledge they need to detect scams for themselves. And we know from testing it's already increased the rate at which customers cancel Marketplace purchases by 300%. We're proud to say that the UK's Fraud Minister, Lord Hanson, has publicly endorsed scam intelligence. His praise comes at a time when app fraud is costing the UK approximately £1.17 billion per year. But more than that, it's costing people their hard earned savings and their confidence, leaving so many people feeling powerless and at times ashamed. With scam intelligence, we really want to give that power back to our customers, helping them to make more informed decisions and make purchases with confidence, but they should not feel ashamed. The biggest originator of app fraud is social media platforms such as Meta and platforms such as Facebook Marketplace. And these platforms are largely going unchecked. At Starling, we will roll out all the tools we can to protect our customers, but this does not tackle fraud. App stores.
- [06:51]
A
Wow. I mean, such an interesting feature, such an important feature. I mean, may we'll come to you first on this. We talked in your introduction about, you know, again, an important set of sort of AI based tools that you guys have proudly just launched. But again, this one feels like a really, really important, really sensible application.
- [07:13]
D
Yeah, definitely. I think at the heart of it it's the customer experience. So the UX making it easy for a customer to engage with this kind of tool. Clearly at the heart of it there is the AI capability. So the collaboration that Starling has, using its own proprietary data to pick up as many of the potential fraud to then interpret the data to say, as Benedet said, picture looks a bit too fuzzy, too good to be true and those sorts of things only 10 left in stock, so you've got to buy now. Those sorts of things are, I think really helpful and needed to help stop the authorized push payment fraud. At the heart of it, it's really around putting a little bit of friction into that system that the customer needs and interjecting with, I would say just basic common sense to say, hey, let's just think about it before you actually make that purchase. Do you want to do that? I think it's the step and definitely the step in the right direction. You know, it won't solve everything. It requires a customer to be a little bit proactive about it as well. So the onus is there on the customer to do something with. Definitely won't some things which are a bit more prevalent around romance scams and things like that. But I do think that it's helpful that it is targeting where a lot of fraud comes from, which is the social media space where meta has not been stepping up to the mark. So this is a really smart way to actually intercept those kinds of scams. So we definitely welcome seeing those sorts of things come in.
- [09:08]
A
Yeah, I couldn't agree more. I mean, I know it is something that banks and fintechs increasingly are responding to and trying to address. I know for example nationwide have their scam checker service which, you know, customers can phone up their call center and sort of share details of the transaction that they're thinking about making and almost sort of sense check it with their staff to see whether they sort of think it, it might be a scam. But Rory, picking up on May's point about the convenience, the ease of use, the timeliness, do you think that's going to be an important factor in sort of adoption here? Being able to just sort of very quickly, at the push of a couple of buttons, sort of get it, get a sense check about whether or not this purchase might actually be fraudulent?
- [09:57]
C
Yeah, look, I think it's, I think it's a great application. If I'm honest. I'm somewhat surprised it's a first for the UK given how long generative AI has been around. If I'm really honest, I think that if you think about our business, our business is effectively getting a balance right between payments acceptance rates and a fraud risk tolerant rate that merchants want to apply with various consumers across the Payment Inc. Transaction. So payments businesses and PSPs like Checkout have been using AI, generative AI, machine learning, data science for years to drive up the balance between acceptance rates and management of fraud and risk and all those kind of things. But I think, look, I think the reality here is it is that balance right when acceptance rates drop because maybe forward controls or forward constraints are over optimized that can cost revenue and can deliver some pretty awful consumer experiences. And we know that over 40% of consumers will abandon shopping carts if the experience isn't right or if they feel that the payment isn't going to go through in the right sort of way. And as we say, that impacts revenue but it also impacts brand loyalty as well, which is a key thing. So I think trust in the system is really important and I think that we should all be using Genai on both driving acceptance rates and reduction of fraud in multiple use cases. And I think that especially as we go into a new era of commerce where agents are going to buy on our behalf, we're going to have to work pretty hard across the ecosystem to make sure that the trust is put into the transaction and people feel comfortable about it. And fraud is optimized, but so is acceptance rates.
- [11:40]
A
Yeah, absolutely. And look, to your point, when they're saying that there was sort of a 300% uptick in consumers walking away from transactions from having used the service, well, actually then there is a real potential for sort of downside risk here or false positives for the retailers. And I mean, that in itself is also a scary prospect, right?
- [12:00]
C
Yeah. Look, fraudsters will definitely be using generative AI. So everybody in the system has to use generative AI. And I think it's, as I said, I think that we've got to use it on both sides of the equation.
- [12:11]
A
Bill. I mean, I don't think it's any real surprise to see banks in particular, fintechs, et cetera, looking at innovative ways for how they can start to combat fraud. Again, I don't think it's necessarily a surprise to see AI being applied to solve for that challenge, but I mean, fraud scams, it seems like they're just ticking up all the time, right? It's definitely a growing space.
- [12:40]
B
Oh, absolutely. I think if you look at, as Rory had mentioned on the back end, we've been using AI for quite a while. You know, we have a number of tools, whether they're transactional based fraud tools, whether they're account takeover, identity fraud, whether they're scams, you know, social engineered scams or whatever it is. We've had to, you know, employ AI because frankly, the scammers do. And you, you try to always stay one step ahead, which is very difficult because they're some of the most creative bunch in the world at what they do and the things that they bring to bear. And really it's the balance that you face, as Rory kind of alluded to, is you want to insert enough checks and enough friction to catch and prevent as much of the fraud as possible, while yet still not completely, you know, just putting down a bad user experience because that's ultimately your customer satisfaction and your customer's ability to spend their money is equally important and not only to mention the revenue aspects of that. And so I think it's a big balance that you come up with. Your goal is to prevent fraud before it happens. Obviously our goal is to leverage AI to capture a vast majority of that where you can and then kick it out to humans to leverage on maybe some of the other stuff. So it's always that balance and then introduce enough friction so that it's not, you know, there is some common sense that has to be involved from the end user perspective. And how do you enable that as well. And so I think that's what we work on each and every day to do these. And AI is a huge important part because a lot of it, AI can catch and then let, you know, free up for your human interactions to be. For the little bit more tricky ones.
- [14:31]
A
I think that's a really important point. Right there are maybe the low hanging fruit that the AI can just sort of COVID off, and that's very much within its capabilities. But then you make your, you make your human centers, your human interventions a lot. You optimize for the more sort of high value, high impact, maybe more complex situations. May I want to kind of give you the final word on this. You know, we talk a lot about AI now and I'm sure we'll probably touch on it on every story as we go through and we'll probably touch on it in every story that we cover in the podcast for a long time to come. But it's really interesting. This for me is almost. Yeah, but you've got to, you've got a, you've got a balance with the, the user experience. But picking up on Bill's previous point, this almost feels hygiene, this feels table stakes now when it comes to how you are protecting your customers, how you are protecting consumers on the back end. And that to me feels like, all right, yes, there probably are some really exciting sort of features that we can look forward to in the future on the front end. But to Bill's point, combating the scammers who are using this technology, not always being on the back foot, seems. Seems really important, seems table stakes to me right now.
- [15:50]
D
Yeah, absolutely. I think it definitely is. As all players level up, there definitely needs to be this essential toolkit. As Bill said and Rory said, everyone, all these scammers are using AI. So we also need to level up and also use AI to combat it, but in a way that achieves that right balance, right. So that you still have the customer delight, but you still have the necessary bits of friction in there. What we've been working on is a theme called high assurance, which is really around finding tools within AI that can help provide the right level of Assurance to make sure that you have a high level of validity and accuracy in doing things. Because the fail rate can be quite. If you get something wrong, then that could be fairly catastrophic. So no hallucinations in there. And I think that's where we will see AI go five to ten years from now. And it's not that it's, you know, friend, it has to go that way, especially in highly regulated spaces like financial services, but also in other sectors like defense and health care and energy.
- [17:05]
A
Yeah. And, you know, as we've, as we've seen now for so long, especially when it comes to sort of bad actors, they will find new and innovative ways that we haven't even thought of to apply these technologies. And so we'll have to keep adapting. So it's going to continue, I have no doubt whatsoever, to be a very fast moving space.
- [17:23]
D
Yeah. And I think just a final word on that. Like, I think a lot of these, you know, it's very dynamic. Scammers are continuously thinking of new ways to defraud us into. Actually, if there's a way to collaborate amongst industry participants to share anonymized fraud markers, then that can only be a good thing for the market. So I think, you know, if we want to be optimistic about where we can go in the future, and we should not be islands, we should try to collaborate as much as possible.
- [17:58]
A
Yeah, couldn't agree more. Absolutely. Killer point. All right, I am going to move us on to our next story. This one comes from FinTech Global with a headline, Uber partners with checkout.com for global payments. So Uber has selected checkout.com to provide acquiring and gateway services for its ride sharing and delivery platforms across multiple international markets. The collaboration aims to improve the speed, reliability and scalability of transactions processed through Uber's platforms. Uber will leverage checkout.com's Intelligent Acceptance Technology, an AI solution designed to optimize transaction routing and reduce payment failures. Rory, I mean, obviously great to have you on to tell us a little bit more about this launch. I'd love to maybe hear a little bit about and maybe the origin story. How did it come about?
- [18:50]
C
Yeah, look, I think the first thing, there are a few global merchants that are synonymous in the world of payments because they just push the boundary of what's expected in payments. And I think every one of us on this call and beyond would remember their first Uber. When did we actually pay for something? It was so invisible. It was just a magical moment that we only kind of realized when we probably got the email. So Uber, for A long time has been a thought leader and a great innovator to create magical moments in, you know, and change the way we all use mobility services, basically. So we've been working with the Uber team for some time, spent a lot of time with the Uber guys talking about where they're going in their strategy, which markets, et cetera, and whether, you know, what they're looking to add to their platform and the services that they're going to add. And we're delighted that they're selecting checkout for the combination of like global reach with local expertise, which is really important in payments because ultimately all payments are local. Right. They are paid by somebody to somebody else in that sort of sense. So we're thrilled to work with them. They're a great team joining the likes of eBay, ASOS, Pinterest, HelloFresh, Deliveroo, Klarna. Brands that really shape how we consumers interact with digital brands on the Internet. So really, really excited to work with the team.
- [20:06]
A
Yeah, I mean, incredible brands that you mentioned. And I'm sure you guys really are exciting because it's a headline grabbing partnership. And I couldn't agree more with what you said about Will all sort of remember that first Uber payment, how going back to your point, Rory, in the previous story about user experience, I mean, that really sort of set a bar, didn't it? And you know, I think it was one of those maybe the use case that sort of made APIs sort of brought it to life a little bit and sort of the value that it can add in terms of delivering those seamless experiences. Yeah. What are you, what are you sort of most excited about in terms of, you know, the launch, the partnership?
- [20:47]
C
I think it's combination of things. I think that, you know, Chekhout's entire pursuit actually is to kind of optimize what we were talking about in terms of payment acceptance and the reduction of fraud or optimizing for fraud. So, you know, the reality is that, you know, when we put physical cards in machines and you know, buy goods and services through merchants, the acceptance rate is typically, you know, way above 99.9% probably most of the time these days, especially with chip and pin. I mean, when we use the same cards online or in apps with digital brands, that can drop to sometimes as low as 80% because of the additional checks that are required. And it's important that they are required because it is a different paradigm. But we work tirelessly on AI optimizations. We process roughly 80 million AI optimizations every day across a total volume of 300 billion of e commerce transactions in 2025 to make sure that we're driving up the acceptance rates. And to Mei's point earlier, the collaboration we need with issuers, card schemes, merchants to take things like device identification or fingerprint or data packets and really sort of share that data so that actually we are blocking and identifying any transaction that is fraudulent and accepting any transaction that is actually bona fide and real. And getting that right is really what we sort of pride ourselves on. Because at the end of the day, we don't like to pay for anything. Right. No consumer likes to pay for anything. So, you know, the payment experience, if you like, should be invisible more than anything, which, you know, so when we, when we do our job really, really well for Uber Ross in the years to come, we should continue helping the payments be completely invisible.
- [22:29]
A
Yeah. And look, we've all had that experience where you go through an online, you fill out the payment form and all of that and you go through and then the payment fails. And it is, it's a, it's a horrible, it's a horrible experience. And you know, I think there's, there's probably parallels with some of the stuff that we were talking about on the previous story about. It's almost we're shifting the focus away from that sort of like what are the big sort of shiny sort of exciting new experiences on the front end and almost what are the things that really are so important on the back end to actually sort of like, you know, enabling that customer experience? And bill, you know, when we talk about things like speed, reliability, scalability, again, I think as much as those things can be optimized, it's kind of, you know, non negotiable, I would say, nowadays.
- [23:19]
B
Yeah, I mean, absolutely. When you look at what the consumers expect, they expect you to get it right and they expect it to be fast. Right. And as limited friction as possible. And then when it is wrong, they also expect you to solve that problem in a timely and an efficient manner. And so I don't think we can sacrifice things like speed and reliability and convenience completely in the quest to prevent the bad things from happening or to do that. And so that's the balance. Right? You have to still be able to deliver those at a very, very high level, but yet at the same time we've got to make sure that we do it right. And so that becomes very challenging when you start to get into global remittance, cross border, you know, type of stuff where you have travelers going all over the world and booking Ubers and you know, underneath the covers, that's a, that's a very specialized thing about whether you take a payment in Japan versus whether you take it in Cambodia versus Europe. Right. And, and how do you do that and how do you process that and ensure that at the end the consumer gets charged the right amount and the brand gets what they're expecting as well. And so I think that's one of the big challenges. And AI plays a huge role in how it can do that seamlessly and much quicker than if you were to try to put human power to it. And so AI has to be embraced to maintain that speed, complexity and accuracy.
- [24:51]
A
Yeah, couldn't agree more, May. The Uber VP of Global commerce, Carl Hibbert, said riders trust Uber to deliver a magical experience that just works and that extends to how they pay. And I think that's, that's sort of played out in the things that we've talked about in terms of like, it's a weird one, right? Like, nobody really remembers the first payment that they made on something, but they do for Uber. And that I think, I think that speaks to that. But then no surprise in terms of them applying AI to how they continue to raise that bar.
- [25:25]
D
Yeah, absolutely. And it's true, I think everyone remembers their first Uber ride and how seamless it was, but they equally also remember when a payment fails and how painful it is to try to pull out a different credit card, especially if you're in a foreign country and you don't speak the language. So I think AI has a massive role in trying to reduce that friction. And I congratulate Rory and the team on what they've achieved. It's really great. And I think AI at the heart of it, the AI driven routing mechanism to try to find the optimal route is actually really complicated. I think a lot of people don't actually recognize how difficult it is to orchestrate it all, but I sort of liken it to almost like a finely tuned Google Maps sat nav, which is identifying the best optimal route for that payment flow to go, evolving all of the red bits where you're gonna get stuck at some sort of trafficked junction. And it's using real time data, right, to constantly refine through its machine learning capability to continuously find the best route. And I think that's super smart. But coming back to Bill's point, we have to make sure that the right guardrails are in there. And again, it's a fine balance making sure that it' not discriminating or has a certain bias in there and avoids certain things and has the right level of explainability as well. So that's a bit, I think that is particularly key in a regulated industry is the regulator does demand traceability and explainability. And finding that right balance is something that we've also been doubling down on within our high assurance theme of finding something that's highly accurate but also explainable. And that's a really unique balance to find.
- [27:33]
C
And if I can, may I congratulate you on a great. And a metaphor that we can use. There are hundreds of developers and engineers at checkout to explain what they're doing every day because it is, you're right, it's super complex work and it has to be done actually in 300 milliseconds or less every time that this is kind of optimized and it can break on the simplest of things. Some issuers here in the UK would reject a postal code with not using capital letters, for example, in the postcode. So those data packets would be rejected. So we have to run those optimizations all the time, in real time, beyond real time, to make sure that transactions are managed in the right way and optimized for sure.
- [28:14]
D
Great. You can take that analogy, Rory.
- [28:17]
A
Yeah, I loved that as well. Rory, Just sort of one final point to get your thoughts on this. And this feels like a bit of a tee up, obviously, given, given your role. But what I really like about this is it feels like, you know, it's sort of payments becoming a real point of sort of meaningful differentiation or almost like competitive advantage. I guess that's something that you'd sort of buy into. Is that fair?
- [28:43]
C
Yeah, of course. I mean, look, you know, the really basic level, if you can't take a payment, you can't generate revenue, and you can't generate revenue, you can't generate profit and you can't generate profit, then there's no cash. So at the end of the day, the payment is highly linked to those. And look, you know, we've for the longest time, as you'd expect, wanted to champion payments people because they do live in a world deeply, deeply complex with regulation. As you go around the world, complexity. As you go around the world, all these different types of payment methods, digital wallets, for example, now are growing faster than any other payment method. They're growing by 200% per annum, particularly with the younger generations. So there's more and more complexity put into this system and it's right at the epicenter of, as we've been talking about, consumer experience or CX and The ability to process revenue combined with some of the hottest technology topics on earth right now, possibly with the exception of space and drones, but maybe even payments will get there too. I don't know. But I think it's an intensely rich area and we think that payments professionals duo deliver a great competitive advantage to their organizations. We see brands that have positioned payments as a much more strategic part of the product or succeed part of the consumer experience. And those are the ones that are really drawing on it and leveraging it and I think that it's obviously making a difference. And look, we would love to start debate on whether, you know, the next C level role should really be a chief payments officer rather than anything else because it's that critical to revenue and it's that critical to competitive advantage.
- [30:08]
A
I love that. That feels like something we should maybe get you back for a bit of a deeper discussion on an Insights show. I think we'd be up for that. So one for maybe producer Izzy to take away but look like just to just sort of reiterate, you know, the Congratulations. It's a really cool feature. I think it's a really cool step forward in payments and obviously a really cool partnership with, with Uber. So, yeah, massive congrats.
- [30:35]
C
Thank you. Thank you. We'll pass that on.
- [30:37]
A
All right, well now on that note, we're just going to take a quick pause here and we'll be back with you very shortly. Now, before we dive back into the news, a quick word about our latest Insights episode. This week on FinTech Insider, we're looking at a trend quietly reshaping global finance. That's the slowdown in sanctions activity. Our host, Kate Moody, is joined by an expert panel in partnership with LexisNexis Risk Solutions to break down what's behind the numbers and what it means for fintech's navigating compliance in 2025. With the latest Sanctions Pulse report showing a 40% drop in new designations, the steepest decline in three years, the team explores delistings, enforcement trends and how automation, AI and real time data can help fintechs stay ahead. Whether you're leading a compliance team or just curious about the forces shaping financial regulation, this episode is packed with insights on turning a quieter sanction cycle into a smarter strategy. Find it in the same podcast feed as this one. And now back to the news. Now this story comes from stock titan with a headline swip Earn and fly with Southwest Airlines new Rapid Rewards debit card. So Southwest Airlines, powered by Galileo, SoFi's tech platform, has introduced the Rapid Rewards debit card, allowing Debit first customers to earn points on everyday purchases to be redeemed against Southwest Airlines flights. Cardholders earn 1 point per $2 in qualifying purchases and 1 point per $1 on Southwest specific purch purchases with a 2,500 point welcome bonus and up to 7,500 points annually. No credit checkers required. Monthly fees are waived and ATM withdrawals are free within the Cirrus network, making it accessible for budget conscious travelers. Bill, look, start by extending our huge congratulations really again, another really exciting launch. I mean we're very privileged that you guys are all coming onto FinTech Insider to tell us about these very cool launches. Maybe again, Bill, you can just give us a little bit of the background in terms of how this one came about.
- [32:53]
B
Yeah, no, thank you. It certainly is a very exciting time in the loyalty travel space. And I think you're starting to see large of these programs went away 15 years ago and all of that when Durbin was passed and they became a little bit less financially viable. But I think we're starting to see them come back in a big way and we're starting to see brands look at a very keen segment of their consumer base that actually is debit first in a lot of regard. And so when you ask how these kind of come together, I think it's emerging of the trends where consumers or large segment of consumers are headed and the brand's realization that loyalty is super keen for em and they want to reach all segments of their customers, just not those that might be credit first. And so these have started to kind of come back and we've had a number of discussions. You saw that earlier with our launch of Wyndham and this follows up on that success and we're very excited and it will be many more I think as you'll see this in the coming weeks, months and years. And so very excited about the partnership and looking forward to talking about it.
- [34:12]
A
That's great. And Bill, it's clear from listening to you speak about it that inclusion is really sort of at the heart of this. I mean, not just is it debit first, which is sort of unique in its own sense, but the fact that the monthly fees are waived, free ATM withdrawals, no credit check. Was that something that you were sort of was very much at the forefront of sort of designing out this proposition?
- [34:39]
B
Oh, absolutely. I think, you know, if you look like a brand like Southwest and they have such a great following, such a loyal consumer base, but yet in the rising preference of debit amongst a big portion of customers, whether it be the younger Gen Z type of customers that actually have proved that they actually enjoy debit more. It's not so much that they don't qualify or can't qualify for credit, it's just they make the preference on debit to the people that maybe haven't had the ability to do a credit backing for a lot of different reasons. This is a way that they can now enjoy those same type of rewards from a brand and really get leverage out of the travel that they are going to do. I think it's driving that financial inclusion and I think this is the way the brands are waking up and realizing that, hey, we want that segment. We want to make sure that they are just as loyal as our other consumers. And so this is kind of that way to reset and kind of bridge that gap.
- [35:44]
A
Yeah, I mean, 46 million is, it's no small segment. Rory, I saw you sort of nodding along as Bill was making those, those points. I guess a lot of that sort of resonated.
- [35:55]
C
Yeah, I think, I think that's right. I think, I think the, you know, the best brands are constantly upgrading their loyalty schemes and rewards programs in line of the latest generational trends and views on all sorts of things. And look, I think that Bill will know much more than I will. But travel is one of those things you pay for that can actually make you richer. Ross so you have to think about it very preciously and see how it works in our world. We know when it comes to, you know, using AI and agents in the perching process or travel, and many things beyond generations feel about it very differently. We've got a piece of research we released yesterday, actually, that surveys 2,000 consumers in the UK and 2,000 consumers in the US about exactly about how they're willing to use agents in the shopping process. And 72% of millennials like me, I wish are very comfortable letting an agent spend on their behalf, Whereas those over 55, it drops off the cliff, which you'd very much expect. And again, there are very different big differences by region. 57% of US consumers are comfortable letting AI make purchases, but it's only about 39% in the UK and happen to be in San Francisco after Money 2020. And I can see that literally every billboard and every poster is an AI ad for some company that, et cetera. So the exposure, I think, that the US audience has to AI is probably driving some of those behaviors. But look to the point, I think that, that I always celebrate when brands are updating to include the trends of the future consumers. And I think, as Bill pointed out, I think that the debit preference has been long ignored in loyalty and reward schemes. And it's great to see that it's being addressed. Great.
- [37:43]
B
Yeah. Ross, if you look at it, 90% of US adults in the country have debit cards and there's spending on debit has now reached $4.3 trillion annually. Like it's just a market that if you're a brand and you're looking to drive loyalty, you really just can't ignore. You have to have some offering. And the economics might make that offering less than say a credit, a traditional credit loyalty type of offering, but it shouldn't be zero. And so, you know, I think we've brought some very unique technology to bear that now makes it achievable again where maybe before it hasn't. And we've worked really hard on working with a partnership and an ecosystem to craft together a solution that these brands can now actually lean in and start to have that connection and that outreach with those very specific customer sets. And I think it's only going to increase. The younger skewing, as Rory just mentioned, the younger skewing of the demographics, one, their ability to want to travel and gain those experience, like you said, is it one thing that the cost of travel actually can make you richer? And I think the younger generation really buys in to that and they want that experience and they want that brand loyalty and the brands are wanting to capture that. So it's really a symbiotic relationship between the two.
- [39:05]
A
And Bill, I guess that point that you made about technology almost sort of making the model work, that's quite interesting because if I look at for example, British Airways here in the uk, who've long had a highly valued avios reward scheme and they've recently sort of scaled back a lot of that stuff because the model didn't make sense. And of course from a loyalty perspective there's quite a lot of blowback. But I guess that's, that's the sort of, that's what you guys sort of bring to the table in this instance is the, the technological, the technological difference, I guess.
- [39:40]
B
Yeah, I mean, I think that's, and that's where like things like AI really can, can AI can make certain aspects of what we had to do before previously manually very automated and you gain some efficiencies, you gain some insights into that. And so by now using API, AI enabled technology, a unique set of capabilities, we're able to create a solution that works for our partners and clients and frankly the end consumer, which is really what you get the adoption in and buying. And I think it's only going to accelerate as we look to design those user experiences to match the consumer value prop with an economics that works for the brand. And I think that all has to be rappered. It can't just be to the benefit of the brand, it can't just be to the benefit of the consumer, it can't just be to the benefit of the providers. It really has to come together and offer a value across the chain.
- [40:43]
A
Yeah. And that sort of win, win, win dynamic is really clear in this instance. May, I'm really interested to get your thoughts and maybe it's an obvious question, but I think loyalty has always been a big thing in the us. How do you think that stacks up against the UK and other markets?
- [41:03]
D
Yeah, I think loyalty is true. I think in all regions and in the UK we have seen loyalty debit cards, so there's Hilton Honours is one as well. But it's still a bit niche emerging. It's not as prevalent as you said, like it is for credit cards. But from a moral hazard perspective, I do welcome this trend to reward consumers to use debit cards because there is clearly moral hazard around incentivizing consumers to use credit and maybe take on too much credit that they can't afford. And I think Bill's right, AI has been an enabler to make this more economical for debit card providers to provide a loyalty scheme. And where I see this kind of trending towards is it has very much been geared around travel and, and that can in certain instances be not as inclusive. Right. There are a lot of people who can't travel for whatever reason. And so we would love to see that loyalty program to be broader than just travel, but to be around other things that consumers also delight in and that can be like everyday products, which is like a Tesco's or Sainsbury's, things that consumers value. Especially with the cost of living, high cost of living that we're currently going through at the moment.
- [42:39]
A
Yeah, couldn't agree more.
- [42:41]
B
Yeah, I think to piggyback on what May is saying there, I mean, when you look at what these brands now are looking at out of loyalty and certainly travel is a big one, but more and more it's getting into all aspects of our life and that's because with the advent of social media and how easy it is to have a negative experience go broad real quickly, your brand wants to have loyalty. So when there is an inevitable misstep. And there always will be. The consumer gives a little more grace if they feel loyal to the brand. Right. If they have that experience, if they've had good experiences. And now the power of one consumer interaction is greater than ever. And so you have to think more broadly with, and globally honestly with your feature functionality and choice that you're giving your consumers and how you bring them into that brand and create that so that when you do have that one mistake, it doesn't just go viral because they, they post it and all of that. There's more of a relationship there between that brand. And that certainly starts with travel and hospitality. But as May said, I think it goes beyond that every day to, you know, the gas station, you go to the grocery store, you go to the, you know, even your child's daycare, whatever it might be. It all becomes important. And so loyalty, I think, has just become or will become a more broader suite that the brands need to put into their toolkit.
- [44:08]
A
Yeah. And do it right. So that, you know, they are properly aligned with the interests of their customers and consumers. I completely agree. And look, Bill, thank you again for coming on and sort of giving us the firsthand perspective. All right, our next story comes from payments with a headline, Citi and Coinbase team up on Digital Asset Payment Capabilities for Institutional Clients. Citi and Coinbase are teaming up to enhance digital asset payment capabilities for Citi's institutional clients, aiming to bridge traditional finance with blockchain technology. The collaboration will initially concentrate on improving fiat on off ramps and payment orchestration, facilitating smoother transitions between fiat currencies and digital assets. Plans include exploring alternative fiat to stablecoins payout methods and expanding 24. 7 access to digital asset payment solutions for Citi's clients. Leveraging Citi's extensive global payments network, the partnership aims to provide scalable and efficient digital asset payment solutions across multiple markets. Rory, maybe I'll come to you first on this just because in one of the previous stories you mentioned about AI even outdoing stablecoin conversation at Money20 20. What's your, what's your sort of initial reaction to the, to this story?
- [45:35]
C
Yeah, I think, look, it's super interesting. I think, you know, we're still seeing the fusing of arguably legacy or incumbent financial backbones with those required to bring digital asset classes into the, into the mainstream. And, and look, I think the, the very obvious thing to say first is that, you know, I think crypto benefits from endorsements that builds trust, whether that be regulatory or big brands. Or traditional finance institutions like Citi and Coinbase having partnerships that sort of fuse those two worlds. I think that the sort of crypto adoption will benefit from that fundamentally is kind of the first thing. And then secondly, it's just, it does always amaze me. I mean, many merchants that we met@money 2020 this week in Vegas, there's still too many merchants beholden to the legacy infrastructure. And we shouldn't be moving money around the world, shouldn't be dictated on whether banks in Asia are open for the weekends and therefore payments and settlements will actually happen. The movement of money needs to be updated to the digital experiences that we're providing for consumers. And that definitely needs to happen. So if this partnership accelerates that, I think that's great. But I think those are the two things I'd sort of make is that one is that I think crypto benefits when these sort of partnerships are announced using those two worlds. And then secondly, there's still a long way to go in connecting global money movement and bringing it into the digital age.
- [47:02]
A
Yeah, maybe the correspondent banking model has had its day. Bill, what are your reflections on this one?
- [47:10]
B
Yeah, I think this is certainly one announcement of what will be followed by many announcements. And to piggyback what Rory says, I think the importance of bringing the traditional regulated entities, which are the, you know, the banks and other institutions merging with the newer players in crypto. I mean, consumers are going to be impacted by crypto in a lot of different ways. I mean, most people think of buy, sell, hold, but the reality is in terms of practice, it's going to be money movement, stable coins and behind the scenes, cross border and all of that. The digital money movement is really going to have a lot, a lot of benefit. And the banks getting into this, I know that certainly would a consumer rather have their stablecoin or their crypto experience at a regulated bank versus a, you know, digital crypto startup. And the absolute is absolutely the trust that they have with, with the institutions and the, the ability for them to lean in and be part of the solution will only, you know, speed up an aid adoption. And, and I think there's the stablecoin and the genius law that allows now the banks to play in that space is just going to bring a wealth of options to consumers and businesses.
- [48:27]
A
Yeah, absolutely. And look, I think done right, and I think you've articulated this so well, again, Bill is done right. I think, you know, there's clear upside here for Citi, there's clear upside for Coinbase, but there's Also then clear upside I think for the end users. What do you think May? What was your sort of reaction to reading this one?
- [48:52]
D
Yeah, totally echo what Rory and Bill say. The Genius act has acted like a regulatory catalyst which is super helpful. Also comes at the right time where technology is available for it to happen. And we are fusing the plumbing, as Rory referred to, between old and new. And that bridging between on and off ramp is gonna be pret crucial to make sure that new and old is knitted together in the most seamless way. And I think there is a lot of argy barging around making sure that you're sort of getting in front of everyone else because I think that there will be a wave of adoption that's going to happen here. The last thing I'd add to this is actually yes, we've talked about real time settlements. I think in this day and age where consumers, consumers are largely really used to instant delight and visibility over where their payments are going and able to trace it, I think this adoption will really help. And the last thing is actually the combating fraud aspect because of the tokenization aspect of it because you can actually really trace the digital assets. That's actually the really super important, important. But the utilization of the blockchain technology there.
- [50:22]
A
Yeah, no, couldn't agree more. And Rory, I suppose one just sort of final thought on this. I think we've seen, and this is picking up on your point about that partnering at the infrastructure level. I think we've seen various sort of announcements over the years that have felt like much sort of lighter touch partnerships. Do you think, think. I mean it's still quite early with the Genius act, but do you think actually that's a real enabler now and we could see those, those deep partnerships actually sort of catching fire and really good user experiences off the back of that.
- [50:56]
C
Yeah, I think look, if they, if they, you know, they're providing value for their ecosystem, whether that be, you know, consumer or any sort of merchant or any sort of institution that's in that, in that ecosystem, then I think that we'll see those, those accelerate. I think. Look, you know, my simplistic view here is that crypto is a highly disruptive technology. And it's quite common in fact for highly disruptive technologies to require regulation to breed consumer trust. If we go way back to the car, it was a fairly disruptive technology and speed limits and seat belts came way after the car was invented. So I think it's a normal pattern. If we look back to history and I think that the use cases of cross border or money movements globally, settlement use cases make a ton of sense, for sure. I think we're a bit away from the kind of payment acceptance side. I think that, I think that there's still a leap to go in when we think about consumers paying for things in stores or online with particular crypto pieces. But again, I think those will come and I think our point of view on that is we will accelerate those and merchants require them and our customers require them, to be honest. But I think you're right. I think it's infrastructure place first. And look, I think that again, as we said, the more significant work adds value to the ecosystem, then I think the more they will happen, for sure.
- [52:18]
A
Yeah, I think that's absolutely right. And look, it's one that as ever, we will continue to keep an eye on. All right, on that note, we're just going to take another quick pause and we'll be back with you very shortly. Okay, now for a quick look at a few more stories very briefly that we don't have time to cover but have excited us coming out of money 2020 in Las Vegas this week. So this one comes from Reuters with a headline, dutch Online Bank Bunk Gets US Broker Dealer License. Bunk, a Dutch online bank with over 20 million users in Europe, has received a license to operate as a broker dealer in the United States, enabling it to sell US Stocks to American customers. The broker dealer license is part of Bunk's broader strategy to expand into the US market. Had previously applied for a US banking license in 2023, but withdrew that application and intends to refile when ready. The move signals heightened competitive pressure in digital banking and fintech as European challengers such as Bunk and Revolut seek US Expansion and broaden their service offerings beyond Europe. To give us more information on this news, we have a voice note from Joe Wilson, chief evangelist at Bunk.
- [53:36]
B
The big news today is that we've been granted a broker dealer license in the U.S. now, we've always had global ambitions and had our sights on the US but more importantly, our users demanded of us people who are on our platform work on both multiple continents, multiple countries, and the US Is a big part of that. This license means that we can offer things that are investment options like stocks, ETFs, mutual funds when we get a partner there. But we also offer that here in Europe. It's just with a partner here. And it's not the same in the US because there's different regulatory, you know, restrictions. This is at a federal level and we go through all 50 states to register as we set it up. Now we're excited about this. It's a big milestone for us, I think the industry as well. There's more to come both for the US and beyond. So just stay tuned and we'll keep you posted.
- [54:26]
A
I love jazz excitement that comes right through the the voice note for sure. All right now finally it is time for something a little bit different as ever from the world of business to finish this week's news show. Now this one comes from tedxtra with a headline JP Morgan let staff use AI to help write Performance Reviews. So JP Morgan Chase is allowing employees to use its in house AI system LLM suite to assist in drafting year end performance reviews. The bank emphasizes that AI generated content should serve as a starting point point with employees retaining full responsibility for the final submissions. Since it's launched, LLM Suite has been adopted by over 200,000 users within eight months, reflecting the bank's commitment to integrating AI into its operations. Meilin maybe I'll come to you first for your reflections. This feels like it could be an amazing time saver and also it could go go quite spectacularly wrong. What do you think?
- [55:31]
D
I think yes it will be a time saver for the manager, but with all things AI it's reliant on good input data and so I think there is still that required front end process for individuals to document their performance milestones, create the 360feedback back to log how they are doing against those benchmarks before it can actually go into LLM suite for the summary and the write up. So yes, I do think it's going to be a time saver but still requires with all of these things really good input data to go into it. I think the bigger signal is actually just the fact that yes we are seeing large banks and large institutions like this adopting AI more to reduce operational inefficiencies and to just make or enhance the capabilities of humans wherever possible. And that's a good signal and we'll continue to see more and more things like that. I think.
- [56:43]
A
Yeah Rory, that point about using AI as a starting point I think is really important, isn't it? Of course we saw Deloitte this week getting quite a lot of trouble over in Australia for submitting a deliverable to the the Australian government that relied heavily on AI that sort of backfired. So obviously making sure that you've got the right controls and are just using it as a starting point, I think we can all learn from that.
- [57:15]
C
Gosh Yeah, I don't quite say on this one. I think that there's a real fine balance and I think like all these things there will be. The human race will find the right balance in time. Right. But there will be a rotation and then there'll be a counter rotation too actually, in that sort of sense. So on the specific point of use of AI, I think that today's LLM models are the worst LLM models we're ever going to use. They're only ever going to get better and there's been significant sizable investment in every part of the world in this technology. It's only, only going to get better in terms of how it's done and how it's worked. I think the. So predicting what it is not going to do in the future I think is impossible actually. We should also certainly try and avoid those. On the specific of performance reviews, I mean, look, I don't mind admitting that I definitely concatenated the time spent on the documentation part of the reviews and I think that's enormously helpful. Helpful. But I wouldn't try and shorten the discussion parts of the performance reviews that are just so material. I mean, I began my career at GE and it was drilled into us the value of real time feedback and never dodging a difficult conversation and making sure that people got constructive feedback so they improved. And at checkout we have an inspirational founder who's inspired by the athlete mindset and that you can always do better and no matter what you do, there's always a way that you can improve. There's no best, there's only better. And that comes from conversation, that comes from human dialogue. So I'm pretty protective of that bit for sure. But again, I'm sort of ever optimistic that I think we'll find that out and we will protect the bits that need to be human and we'll let the agents do the stuff we don't want to do. Which actually is quite a nice way to do. If we could remove everything that annoyed us about our jobs, then that would help us as human beings too.
- [59:12]
A
Yeah, no, I really appreciate that sort of note of optimism. Where we are right now is the worst it's ever going be to be and it's only going to get better. Bill, final word to you. What do you think of this story?
- [59:23]
B
Yeah, no, I think it's where we're going. And I think a good manager will use AI as a tool to have a good review and provide good feedback in a structured manner and spend less time having to do the gathering and the part underneath and more time actually talking to the employee which will result in a better outcome. A bad manager will probably use it as a crutch and it will be bad and you know, maybe it highlights that quicker of who bad managers are faster and a company can, can, you know, make a change there a thing. But I think using AI, as Rory alluded to do the more manual tasks and free up us as humans to have the more important interactions is really where the benefit and really where the goal of this should be. Um, and if it's done in that, then it can be a really good thing because you then spend more time actually building those connections, giving the proper feedback, encouraging the employee, helping the employee to, to bring their best self to work each and every day. And, and so I think from that stance it's good. Like anything, there's always a flip side. There will be abuse. There will be, you know, people that don't do it well that will cause very negative and you have to be very careful as a company because a couple of those can your company in the news, right, if you have some very bad interactions that you don't want that type of negative publicity as well. But overall I think it's where we're headed. I think it's how we manage it and we've all got to get used to finding what the balance is where AI can improve our lives and we use it for the better and not the other way around.
- [61:00]
A
I love that. Right, that concludes this week's Fintech Insider news. Thank you so much to today's guests. Maybe we can just do a quick run around the virtual room and you can tell us where people can find out a little bit more about you guys and about your companies. Rory, how about we start with you?
- [61:18]
C
Ours is really simple. It's checkout.com. so yeah, you can find a lot more about, check out what the work we're up to worldwide on our website.
- [61:26]
A
Superb. Bill, how about you?
- [61:28]
B
Same thing with me. Galileo FT.com or sofi.com either one provide a wealth of knowledge and then Obviously I'm on LinkedIn. You can always look me up. Bill Kennedy and if you have any questions, you know, fire em off.
- [61:41]
A
Perfect. Thank you Bill, how about you May?
- [61:44]
E
Same thing.
- [61:45]
D
Anthemos.com is where you'll find me. And in terms of Common AI, it's the new partnership that we have, it's commonai.org and yeah, I can be found on LinkedIn. It's Mei Lim.
- [61:57]
A
Superb. Thank you Mae. As for me you can find me likewise on LinkedIn and you can find out more about 11FS on 11FS. Thank you so much for listening to Today's episode of FinTech Insider. If you like what you heard, please make sure to follow us on your favorite podcast platform of choice. And if you really like what you heard, why not share the podcast with a colleague or friend? As always, if you want to join the conversation, find us on social media. Just search for 11fs or fintech insider or email podcasts.com. thank you again and goodbye.