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Speaker 1: Get a Koto. Welcome to Shared Lunch, brought to you

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Speaker 1: by Chase's. I'm Garth Bray. We led the world in

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Speaker 1: this country with FPOs, the ability to pay for stuff

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Speaker 1: electronically by waiving a card. But that was forty years

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Speaker 1: ago and since then, maybe have we been coasting? Have

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Speaker 1: we let the major banks step back and not innovate

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Speaker 1: as much as they could. Today we're talking to a challenger.

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Speaker 1: Ben Lynch is a fintech founder keen to deliver on

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Speaker 1: the promise of cheaper, smarter, less painful ways to help

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Speaker 1: you handle your money. But before we get into that conversation,

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Speaker 1: some important information you should always consider when thinking about investing.

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Speaker 2: Investing involves the risk you might lose the money you

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Speaker 2: start with. We recommend talking to a licensed financial advisor.

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Speaker 2: We also recommend reading product disclosure documents before deciding to invest.

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Speaker 2: Everything you're about to see and here is current at

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Speaker 2: the time of recording.

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Speaker 1: Ben Lynch from Akahu, Thanks for joining us here on

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Speaker 1: Shared Lunch.

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Speaker 3: Thanks for having me.

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Speaker 1: Look, we started out in this country pretty cutting edge

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Speaker 1: with technology like f POSS. You know, the idea that

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Speaker 1: you could walk in and pay for your groceries or

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Speaker 1: your petrol by waving a piece of plastic at a

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Speaker 1: machine was probably pretty baller back in the eighties. Have

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Speaker 1: we just completely gone off the boil?

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Speaker 4: You know, eighty four was f poss and we certainly

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Speaker 4: haven't done a lot since then. In many respects, I

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Speaker 4: mean that that was ahead of its time. You know,

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Speaker 4: it is great to have a local payments network and

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Speaker 4: payment switch. Increasingly it looks like that won't happen in

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Speaker 4: this country. Cards are being dominated by visa mastercut.

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Speaker 1: Because that's if poss is like the State high before

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Speaker 1: they put the toll weight through, right.

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Speaker 3: It was, Yeah, it was a payment switch.

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Speaker 4: Arguably they just didn't innovate on you know, how does

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Speaker 4: that payment switch operate? So you know, it could have

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Speaker 4: moved quicker to contact lists and still sort of a

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Speaker 4: swipe style pin number, which you know, to this day

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Speaker 4: and age, particularly post COVID, seems archaic.

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Speaker 1: Right.

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Speaker 4: It was you know, owned by the banks through through

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Speaker 4: the paymark quite model, and that was so you know,

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Speaker 4: it's hard to get agreement on should they prioritize spending

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Speaker 4: in that in that sort of network. So you know, look,

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Speaker 4: I think that ship sailed to be honest, but I

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Speaker 4: think there's there's other avenues that we can kind of

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Speaker 4: innovate on.

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Speaker 3: But we are a small country.

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Speaker 1: But does the way that that's happened, does that tell

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Speaker 1: us a lot about what we're going to talk about today,

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Speaker 1: which is open banking, Which is that whole idea of

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Speaker 1: I guess, democratizing your data, making what the banks know

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Speaker 1: about you, what you've told them, all your transactions do more.

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Speaker 4: Right, I mean, I think open banking does nothing else

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Speaker 4: than best products should win. So no longer, you know,

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Speaker 4: are you is this apathy around just staying with the

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Speaker 4: bank you've always been with because you know that was

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Speaker 4: what you got given when you were a young kid

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Speaker 4: and you got your first bank account. But now you

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Speaker 4: know that that you can kind of freely move between banks.

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Speaker 4: You can you know, pick and choose sort of like

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Speaker 4: a you know, a telco. You know, you can take

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Speaker 4: your number with your sort of number portability. So the

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Speaker 4: promise of open banking does hopefully allow us to you know,

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Speaker 4: banks themselves to innovate, but also other non banks to

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Speaker 4: innovate and sort of become you know, maybe a bank

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Speaker 4: without being a bank in the regulatory sense.

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Speaker 1: Is that why I should care about this? Because I mean,

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Speaker 1: most people just want they just want to use their money,

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Speaker 1: they want to know where it is, they want to

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Speaker 1: make the most of it, they want to make the

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Speaker 1: most of their futures. Do they really need to know

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Speaker 1: about the plumbing in the background to all of us?

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Speaker 4: Honestly, no, it's you know, this is not a sexy startup.

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Speaker 4: This is you know, this should be boring, stable infrastructure,

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Speaker 4: and it is secure that just kind of runs invisibly.

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Speaker 4: If open banking is in the headlines post, you know,

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Speaker 4: the kind of honeymoon phase, then something's probably failed. To

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Speaker 4: be honest, it's one of those things that should just

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Speaker 4: run in the background, like the electricity grid or the

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Speaker 4: fiber network from Chorus. You know, it's just a piece

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Speaker 4: of infrastructure, a digital piece of infrastructure that certainly, in

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Speaker 4: my opinion and our opinion, should be owned and operated

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Speaker 4: for the benefit of New Zealanders as well.

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Speaker 1: But it's not right now.

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Speaker 3: Well, it's it's always been.

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Speaker 4: It hasn't been regulated up until the first of December

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Speaker 4: of this year, and we'll we'll get into that a

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Speaker 4: little bit later. So it's always been a sort of

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Speaker 4: a backdoor, kind of reverse engineered approach to creating these

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Speaker 4: open banking type services so that other products can use them.

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Speaker 4: And you know, in this country, the most kind of

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Speaker 4: obvious use case for sharing bank data is pioneered via Zero.

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Speaker 1: I was going to say, Zero seems to me like

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Speaker 1: the logical one.

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Speaker 4: I think, if you're a business and you can the

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Speaker 4: value prop of connecting your bank statements and your transactions

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Speaker 4: overnight so you can reconsulve the next morning, it's pretty clear, right,

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Speaker 4: So it kind of just democratizes that and takes it

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Speaker 4: ten steps further.

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Speaker 1: I grew up in a house where we had small businesses,

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Speaker 1: and you know, Sunday night, Dad would be sitting there

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Speaker 1: doing the books. And I now spend like ten minutes

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Speaker 1: on a phone going and it's all done. And that

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Speaker 1: seems like a massive set forward. Is that the kind

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Speaker 1: of thing that we're bringing to everybody's lives with this

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Speaker 1: kind of technology?

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Speaker 4: It is, And it's almost you know, I used to

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Speaker 4: work at Zero when I was in the bank Feeds team,

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Speaker 4: so I sort of know it intimately well and essentially

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Speaker 4: where I sort of kecked off this whole journey. So

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Speaker 4: it's almost the way I think about it is if

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Speaker 4: Zero bank Feeds was a product and a company in

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Speaker 4: its own right and served more customers than just zero.

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Speaker 4: So it's that connectivity layer, shared infrastructure layer that you

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Speaker 4: know personal finance, accounting, tax investment tools, you know, mortgage brokers,

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Speaker 4: any anyone that needs access to your financial information can

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Speaker 4: get access securely and then share it for those purposes.

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Speaker 1: Well, I mean, let's take the cheesys at for example.

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Speaker 1: I can look at that. I can go, oh, how

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Speaker 1: much have I got invest in the portfolio? What's in

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Speaker 1: my key Wei saver. I can make sort of one

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Speaker 1: off very quick payments, you know, instant payments basically, and transfers.

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Speaker 1: What other kinds of things are going to turn up

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Speaker 1: on the dashboard as this evolves?

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Speaker 4: Yeah, I mean absolutely, I'm I'm a big chezys fan.

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Speaker 4: I think you know you can like you, like you said,

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Speaker 4: reference the key we saver product. Now there's a there's

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Speaker 4: a master card, debit card now you can get with Cheersy's.

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Speaker 4: So you know, it is becoming more and more of

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Speaker 4: your kind of primary financial relationship. But you can also

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Speaker 4: choose through open banking to say, actually I want to

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Speaker 4: keep my ASB savings account. I actually want to keep

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Speaker 4: my whatever bank Kei Wei saver or non Chezy's key

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Speaker 4: we saver, but I want to see it inside of Chasy's.

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Speaker 4: And so I can log into one place and I

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Speaker 4: can see all my accounts, and I might bring my

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Speaker 4: mortgage across with me. Now it's still held with the

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Speaker 4: underlying bank, and I still go to them to change

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Speaker 4: rates or do whatever, but I can see it all

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Speaker 4: in one place. And that's kind of the promise of

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Speaker 4: open banking, is to bring all that stuff.

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Speaker 1: Together, just that dashboard. You can't actually do anything.

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Speaker 3: Now you can do things.

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Speaker 4: Yeah, so you can make payments sort of initiations, So

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Speaker 4: you can make payments essentially from your ASB account inside

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Speaker 4: of Shares's to pay a bill.

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Speaker 1: So at some point you probably stop having a relationship,

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Speaker 1: maybe with your bank. They're just a commodity, right, and

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Speaker 1: your main relationship might be with whoever that who whoever

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Speaker 1: controls that.

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Speaker 4: At I mean, I think that is the race too,

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Speaker 4: who owns that kind of top of the wallet type thing, And.

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Speaker 1: So I can't imagine why the banks don't want that

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Speaker 1: to happen. Then, like a bank's we've got this exciting

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Speaker 1: new product that takes your customers away or put somebody

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Speaker 1: between you and them, like most businesses are going to

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Speaker 1: fight that tooth nail, aren't they.

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Speaker 3: Yeah, look they have resisted it for a long time.

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Speaker 4: But it was always obvious to me that, you know,

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Speaker 4: eventually there would be regulation that would force for a

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Speaker 4: competition's aspect to do it. So it was just a

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Speaker 4: matter of time. I didn't think it would take quite

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Speaker 4: this long. But you know, first of December it is

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Speaker 4: you know, it.

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Speaker 3: Is the law.

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Speaker 1: So what happens on the first So from the.

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Speaker 4: First of December, essentially we have consumer data right in

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Speaker 4: New Zealand. So essentially that's a piece of legislation that

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Speaker 4: says you, as a customer consumer own your data and

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Speaker 4: if you want to share that data with a third

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Speaker 4: party then that's your right.

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Speaker 1: But I mean the Privacy X says that's the case already,

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Speaker 1: and I guess so does. Like my understanding as a

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Speaker 1: journalist using Official Information Act, I get it, but it's

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Speaker 1: how you get it right. And if you write to

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Speaker 1: some minister or some government department say I want a

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Speaker 1: list of X, Y and Z, they will send you

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Speaker 1: a PDF that's impossible to search. Right, this is about

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Speaker 1: is this about getting it in a way that you

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Speaker 1: can actually do something with it.

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Speaker 3: Yeah, you're right.

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Speaker 4: So there's the legislation which is the consumer data, right,

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Speaker 4: and then under the legislation there is it's pretty high level,

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Speaker 4: which is good because it's going to sit across a

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Speaker 4: lot of sectors eventually. Now the open banking is the

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Speaker 4: first sector to be designated, essentially, So that's where you

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Speaker 4: mentioned the regulations CAECK, and there's some standardized ways that

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Speaker 4: the banks are making that data available to you and

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Speaker 4: essentially via APIs, so the application programming interface, so.

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Speaker 3: The ability for plumbing jargon, plumbing jargon.

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Speaker 4: So you know, ironically, actually, when I first started talking

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Speaker 4: about this back in twenty sixteen to some bankers, you know,

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Speaker 4: it was a very new term, not on a tech community,

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Speaker 4: but certainly in the banking community. And you know, half

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Speaker 4: the time I wondered whether they knew the difference between

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Speaker 4: an IPA and API, to be honest, But things have

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Speaker 4: moved along, you.

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Speaker 1: Know, many IPAs.

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Speaker 4: Later, many IPAs later, we have APIs, and so that's

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Speaker 4: essentially from the first of December, these APIs are made

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Speaker 4: available via the bank securely and then for third parties

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Speaker 4: to essentially act on top of those and with your consent.

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Speaker 1: Because up until now, what basically apps have been kind

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Speaker 1: of screen scraping.

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Speaker 4: Screen scraping, reverse engineering, sort of gated access. There's all

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Speaker 4: sorts of things you could call, right Polly's been around

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Speaker 4: for a long time.

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Speaker 1: Obviously, one reason I never used it because the first

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Speaker 1: thing that says is can you please just type in

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Speaker 1: your bank pass? I'm not telling you my pin number.

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Speaker 1: This is the one thing they tell you not to do.

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Speaker 4: It is, but it's it's one of those things that

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Speaker 4: you know, a substantial portion of the country of you

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Speaker 4: use did, and even more so overseas, and when the

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Speaker 4: value proposition is clear, then people tend to, I guess,

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Speaker 4: forego a little bit of privacy for that convenience factor,

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Speaker 4: which is not necessarily a good thing.

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Speaker 3: But it has always been done.

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Speaker 1: But they shouldn't have to.

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Speaker 4: They shouldn't have to, and they won't have to, you know,

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Speaker 4: from the start of next year going forward. But you know,

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Speaker 4: one of the other big use cases if you go

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Speaker 4: to a mortgage broker and they say, hey, can we

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Speaker 4: get access to your bank statements so we can figure

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Speaker 4: out whether we can you know, someone will end you

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Speaker 4: a million bucks and so generally that that's another service

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Speaker 4: that will jump into your online banking portals, grab ale

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Speaker 4: your bank statements, and then they'll run them through some

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Speaker 4: sort of enrichment process to figure out your kind of

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Speaker 4: expenses and income.

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Speaker 1: And this will just basically do that without you having

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Speaker 1: to say password is whatever long.

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Speaker 4: Exactly, So the consents that's with you and your bank

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Speaker 4: sort of thing, so you know, much the same way

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Speaker 4: you might want to connect your accounts, and then you'll

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Speaker 4: say you know clearly what you're doing. And then to

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Speaker 4: initiate that final consent level, you'll normally open up your

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Speaker 4: banking app and you're in there, there'll be the consent

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Speaker 4: that says, yes, I agree to this company having access

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Speaker 4: to my data under these terms, and then I can

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Speaker 4: click okay. And then in that banking app you can

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Speaker 4: always review those consents at any time. It's auditible, and

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Speaker 4: then you can revoke them whenever you want, so you'll

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Speaker 4: kind of fully in control.

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Speaker 1: People say that, well, yeah, but no, it's a huge upgrade,

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Speaker 1: and I think are we ready for it? It sounds like,

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Speaker 1: you know, like RBNZ just stress tested the banks and said, hey,

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Speaker 1: by the way, you need to look at your IT

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Speaker 1: systems and whether they could handle a variety of different

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Speaker 1: pain points like a third party who can't handle it,

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Speaker 1: or you've forgot to upgrade something, or you did it badly.

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Speaker 1: Isn't that kind of low key the Reserve Bank telling

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Speaker 1: banks you guys need to lift your game big time?

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Speaker 3: Yeah.

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Speaker 4: I mean banks have had a lot of compliance sign

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Speaker 4: at them in the last you know, pre pre post

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Speaker 4: COVID sort of thing. So this is what this is

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Speaker 4: one of those big areas that they've had to meet

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Speaker 4: and spend a lot of resourcing and sort of particularly

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Speaker 4: with their I teams and security teams around making sure

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Speaker 4: they're ready and so, you know, it is I think

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Speaker 4: the easiest way to think about it for banks perspective

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Speaker 4: is just another channel. So you know, originally we had,

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Speaker 4: you know, the branch channel came along with some ATMs,

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Speaker 4: and then there was kind of the online channel, and

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Speaker 4: then there was a mobile channel, and now there's kind

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Speaker 4: of open banking channel, which essentially just you know, is

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Speaker 4: another way to think about how they serve their customers.

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Speaker 4: And you know, for a lot of banks, the question

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Speaker 4: will we do we want to Are we best positioned

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Speaker 4: to be the front and center company that delivers that

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Speaker 4: product or are we more of an infrastructure compliance AML,

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Speaker 4: you know, secure deposits type company, very valuable.

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Speaker 1: R checking out you are who you are, which is

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Speaker 1: another big pain point, right every time you want to

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Speaker 1: borrow something, invest in something. Yeah, you know, on boarding

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Speaker 1: to shares he's on boarding anywhere you need to go through.

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Speaker 1: A whole lot of this is.

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Speaker 4: As a piece of shared Yeah, there's there's all those things,

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Speaker 4: and that's kind of the layer that we sit at.

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Speaker 4: And when I talk about shared infrastructure, you know, open

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Speaker 4: banking is one, but there's a lot of other areas

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Speaker 4: that will most likely we'll go into as well.

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Speaker 1: So for thinking I never have to use real me again,

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Speaker 1: very real me.

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Speaker 3: Look.

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Speaker 4: Digital Identity Trust Framework is another piece of legislation that's coming,

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Speaker 4: another piece of tech that's coming to this country, and

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Speaker 4: that is essentially as real MeV too, kind of maybe

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Speaker 4: not built only by the government and more by the

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Speaker 4: private sector, so you know, a bit more of you know,

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Speaker 4: solving actual problems, but essentially it is the same thing.

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Speaker 4: And so there's a lot of foundational building blocks, if

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Speaker 4: you like, before even chearesys could launch an app and

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Speaker 4: one of those is AML, and then you know all

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Speaker 4: those other things. So that's kind of at our lay

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Speaker 4: we handle all those common shared things.

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Speaker 1: So it's anti money laundering by the way, yes, right.

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Speaker 4: And all those things that generally, you know, you verify

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Speaker 4: who you are, all those kind of things that we

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Speaker 4: handle kind of at an infrastructure layer, so that companies

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Speaker 4: like Shares's and others can get on top of building

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Speaker 4: those products for their customers instead of all that kind

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Speaker 4: of shared stuff that just really gets them to the start. Lit.

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Speaker 1: Yeah, just doing it all over and over again. I

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Speaker 1: suppose any number of times. Look, I am hearing a

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Speaker 1: lot about search charges and you know, the amount you

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Speaker 1: have to pay it is that kind of a distraction?

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Speaker 1: Is that like the fight that if you're cynical, perhaps

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Speaker 1: the banking major banks would rather we're arguing about whether

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Speaker 1: or not you're doing payWave and whether or not the

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Speaker 1: merchants should be charging for it rather than all of

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Speaker 1: this stuff.

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Speaker 3: Yeah. Look, I think surch charging is a bit of

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Speaker 3: a distraction.

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Speaker 4: And to be honest, you know, I think I fully

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Speaker 4: approve of the banning of surcharging, and I think it's

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Speaker 4: May next year. I mean, I think it's a cost

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Speaker 4: of doing business. You know, if you look at I

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Speaker 4: think there was a study a couple of years ago

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Speaker 4: on the cost of accepting cash and somewhere around four

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Speaker 4: point seven to five percent. You know, you'd be laughed

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Speaker 4: out at the store if you hand it over twenty

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Speaker 4: bucks for your ice cream and they tried to surcharge

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Speaker 4: you in the cash. You know, surcharging really only came

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Speaker 4: about came about sort of in this country at a

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Speaker 4: mass scale level around COVID, if you remember, with the

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Speaker 4: kind of the QR codes and the whole we don't

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Speaker 4: want to touch money type thing, and it was kind

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Speaker 4: of just kind of left on and they just never disappeared.

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Speaker 4: And so it's like tipping right, you know, yeah exactly,

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Speaker 4: And so look, you know, people do conflate surcharging with

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Speaker 4: open banking, but they are very different things. And then

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Speaker 4: search charging is very much related to your merchant you know,

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Speaker 4: services fees, and that's generally tied to your acquiring model

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Speaker 4: with you know, vs are a master card and whole

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Speaker 4: different things. So open banking is kind of the opposite

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Speaker 4: of that, where it's just unlocking and unleashing enabling the

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Speaker 4: existing payment rails that we already have. So a payment

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Speaker 4: and open banking land already moves between. You know already

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Speaker 4: have an ASB account, you might have an A and

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Speaker 4: Z account. We already have bank account numbers. We just

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Speaker 4: remove a fraction of having to remember them or share

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Speaker 4: them or any of those other things.

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Speaker 1: Right, I'm just sort of wondering. I mean, one of

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Speaker 1: the criticisms I've seen about these rules coming in that

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Speaker 1: you talked about in December are that it's been set

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Speaker 1: up in a way that there's no charging for it, right,

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Speaker 1: that the consumers don't get charged for this, But some

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Speaker 1: people seem worried at the same time you're saying, you know,

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Speaker 1: get rid of search charges. There is no kind of

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Speaker 1: search charge on this, and that's going to make it

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Speaker 1: more difficult to bring it in. Yeah, like I wrought

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Speaker 1: me through that.

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Speaker 3: I don't get that.

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Speaker 4: I don't prescribe to the fact that you know no

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Speaker 4: other country that has legislated open banking charges for your

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Speaker 4: raw data. So this is just your raw data, so

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Speaker 4: your raw account balance and your transaction level details.

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Speaker 1: So that statement you think that's good, It.

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Speaker 3: Absolutely should be free.

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Speaker 4: There's an argument to say that we could have a

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Speaker 4: small couple of cents one cent on a payment because

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Speaker 4: you know, as we referenced earlier in the conversation about FPOs.

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Speaker 4: If you underinvest in a payments network, then generally it

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Speaker 4: disappears sort of thing. And so that is also the

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Speaker 4: banks can't charge for that.

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Speaker 1: But I've got to give the you've got to give

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Speaker 1: the banks and everybody else sort of a reason to

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Speaker 1: play the game.

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Speaker 3: Absolutely and keep investing in this.

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Speaker 4: And you know, we're certainly working with the banks, multiple

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Speaker 4: banks around you know, a premium model. Are there some

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Speaker 4: non sort of legislated API so they can deliver them

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Speaker 4: with more than happy to work out a revenue sharing

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Speaker 4: model with them because we think you know that certain

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Speaker 4: use cases could afford to pay a small fee and

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Speaker 4: certain other use cases couldn't.

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Speaker 3: Sort of thing.

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Speaker 1: What are we talking about if you're getting a big

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Speaker 1: product with.

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Speaker 4: Yes, So if you are like a big consumer product

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Speaker 4: and have a huge customer base, you know, just connecting

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Speaker 4: your bank account data to see your balance and your transactions,

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Speaker 4: say in Chazy's, you know there's little value. Customer is

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Speaker 4: likely not going to pay for that in Chasy's as

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Speaker 4: an extra if that was a cost on Cheesys. But

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Speaker 4: if you're a business and you're offering an accounting solution

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Speaker 4: or a tax solution, and there's much more kind of

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Speaker 4: impetus to pay for that service then you know, a

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Speaker 4: small fee can be passed on sort of thing. So

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Speaker 4: we kind of think moving the charging or the fee

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Speaker 4: model to their kind of infrastructure or the intermediary layer

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Speaker 4: better suits working with banks on a partnership type model

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Speaker 4: is probably where it should will land and kind of

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Speaker 4: where we're working towards.

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Speaker 1: Does this whole technology what sort of a foot in

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Speaker 1: the door does it give to to FinTechs to actually

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Speaker 1: try new things?

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Speaker 3: Yeah, I think it's a huge shot in the arm.

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Speaker 4: I think you know, I've always said, you know, how

403
00:16:37,760 --> 00:16:40,080
Speaker 4: can you be a bank without being a bank? Because

404
00:16:40,160 --> 00:16:42,560
Speaker 4: you know, becoming a bank in New Zealand is you know,

405
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Speaker 4: when was the last bank.

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Speaker 1: It's hard, it's like calling yourself a doctor. It's actually

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Speaker 1: I mean, it's regulated right limits.

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Speaker 4: And it takes years and years and years and a

409
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Speaker 4: whole bunch of cash that is just not available in

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Speaker 4: this country. And so you know, and a lot of respects.

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Speaker 4: If you can be your customer's primary financial relationship and

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Speaker 4: they think about banking with you even though you're not

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Speaker 4: a registered bank, then I think that's a really valuable

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00:17:06,040 --> 00:17:09,040
Speaker 4: position to get into it and probably really enviable from

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00:17:09,040 --> 00:17:11,400
Speaker 4: a bank's perspective too, because there's some really cool things

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Speaker 4: that you can add value and charge for and you

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Speaker 4: know you can still do you know, Sharesies does investments

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Speaker 4: and they do kisaver, and there's you know, plenty of

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Speaker 4: non bank lending, you know, in the in the mortgage

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Speaker 4: market as well now with key Saver funds growing and

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Speaker 4: you know, so there's there's a lot of people tackling

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00:17:26,520 --> 00:17:29,679
Speaker 4: those kind of banks called propositions. And someone that can

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Speaker 4: deliver really cool user experience and you know, a really

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Speaker 4: strong customer proposition, is you really going to do well

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Speaker 4: in that space? Open banking enables that.

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Speaker 1: I guess at some point people might even want to

427
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Speaker 1: be lending Peter peer and sort of you know, leveraging

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Speaker 1: their portfolio and doing all kinds of crazy.

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Speaker 4: Yeah, lucky you kind of you know, to some respects,

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Speaker 4: open banking is great because you kind of it's been

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Speaker 4: legislated the banks. Here's the rules, everyone knows what the

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Speaker 4: rules are. And then just get out of the way

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Speaker 4: and let the market do it. Let the market, you know,

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Speaker 4: good products come to market.

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Speaker 1: But are the banks going to only do the bare

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Speaker 1: minimum to qualify.

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00:18:01,480 --> 00:18:04,160
Speaker 4: The bare minimum achieves a lot, and so I think

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Speaker 4: it will be you know, banks by definition kind of

439
00:18:06,960 --> 00:18:09,320
Speaker 4: all compete against each other, right, particularly the big four banks,

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Speaker 4: and then you throw on key we Bank, and so

441
00:18:10,800 --> 00:18:13,000
Speaker 4: I think you'll see banks some banks say, well, we

442
00:18:13,000 --> 00:18:15,000
Speaker 4: think this is a really valuable channel for the future,

443
00:18:15,240 --> 00:18:16,840
Speaker 4: So we're going to innovate in the space, and we're

444
00:18:16,840 --> 00:18:19,600
Speaker 4: going to offer more business APIs or some other APIs

445
00:18:19,600 --> 00:18:21,879
Speaker 4: that only our customers can access to, you know, do

446
00:18:21,960 --> 00:18:24,000
Speaker 4: whatever they want to do. So I think you will

447
00:18:24,040 --> 00:18:26,600
Speaker 4: see a lot of competition and kind of innovation from

448
00:18:26,600 --> 00:18:30,200
Speaker 4: the banks eventually, but certainly at the moment and kind

449
00:18:30,200 --> 00:18:32,280
Speaker 4: of certainly into the new year, banks have just been

450
00:18:32,320 --> 00:18:33,800
Speaker 4: head down meeting the regulation.

451
00:18:34,480 --> 00:18:37,359
Speaker 1: So I'm just thinking, like, it feels like, you know,

452
00:18:37,480 --> 00:18:39,800
Speaker 1: an app like zero came here, it's just cleaned up

453
00:18:40,440 --> 00:18:42,280
Speaker 1: really well. It's got quite a lock on the market.

454
00:18:42,600 --> 00:18:44,240
Speaker 1: We tend to sort of have one of everything here.

455
00:18:44,280 --> 00:18:46,320
Speaker 1: It feels like, yeah, is someone going to come in

456
00:18:46,359 --> 00:18:48,119
Speaker 1: and just gut the solution and everybody else is going

457
00:18:48,119 --> 00:18:49,360
Speaker 1: to just be forget about it.

458
00:18:49,400 --> 00:18:52,000
Speaker 4: Certainly at the infrastructure layer in terms of what we

459
00:18:52,040 --> 00:18:53,960
Speaker 4: do like it is kind of a winner takes all.

460
00:18:54,000 --> 00:18:56,119
Speaker 4: Like there's only like you said, there's one zero for

461
00:18:56,160 --> 00:18:57,720
Speaker 4: a reason, there's one trade me for a reason.

462
00:18:57,760 --> 00:18:58,639
Speaker 3: Like the market's just not.

463
00:18:58,760 --> 00:19:02,160
Speaker 4: That big here, so you know, there's only one chorus

464
00:19:02,200 --> 00:19:04,840
Speaker 4: for a reason. There's only one transpower for a reason.

465
00:19:04,920 --> 00:19:06,840
Speaker 4: You know, all of these things that operate kind of

466
00:19:06,840 --> 00:19:09,440
Speaker 4: a grid or a sort of a network where other

467
00:19:09,480 --> 00:19:12,320
Speaker 4: people plug into the market is just not big enough

468
00:19:12,359 --> 00:19:16,160
Speaker 4: to you know, to sustain more than one And so.

469
00:19:15,560 --> 00:19:17,320
Speaker 1: So do you wind up having to look around and go,

470
00:19:17,720 --> 00:19:19,320
Speaker 1: how do we do the same thing in Australia? How

471
00:19:19,320 --> 00:19:21,840
Speaker 1: do we do another kind of markets? Too complicated?

472
00:19:22,119 --> 00:19:25,080
Speaker 4: Yeah, it's too complicated. We've decided to focus solely on

473
00:19:25,080 --> 00:19:26,840
Speaker 4: New Zealand. We think we can do New Zealand really well.

474
00:19:26,880 --> 00:19:29,119
Speaker 4: And look, ultimately, we don't think we are probably the

475
00:19:29,119 --> 00:19:31,159
Speaker 4: long term owners of this business either, like we do

476
00:19:31,320 --> 00:19:34,560
Speaker 4: think it is naturally probably you know, a group a

477
00:19:34,600 --> 00:19:38,639
Speaker 4: consortium of industry players that own and operate this this

478
00:19:38,720 --> 00:19:39,720
Speaker 4: piece of infrastructure.

479
00:19:39,720 --> 00:19:41,200
Speaker 1: We have some big key we save the fund or

480
00:19:41,240 --> 00:19:41,960
Speaker 1: something exactly.

481
00:19:42,000 --> 00:19:43,399
Speaker 4: Like there's a lot of you know, it could be

482
00:19:43,400 --> 00:19:45,800
Speaker 4: telcos and there's lots of people in this space. Now

483
00:19:45,880 --> 00:19:50,400
Speaker 4: that that would have, you know, an advantage to co

484
00:19:50,440 --> 00:19:52,800
Speaker 4: owning this piece of infrastructure instead of renting it. Because

485
00:19:52,840 --> 00:19:55,320
Speaker 4: remember their customers as well, So you know, banks will

486
00:19:55,560 --> 00:19:58,000
Speaker 4: be the first to say, you know, which bank's going

487
00:19:58,040 --> 00:20:01,000
Speaker 4: to show other bank accounts inside of their bank interfaces?

488
00:20:01,040 --> 00:20:02,960
Speaker 4: You know, So as much as they produce the APIs,

489
00:20:03,400 --> 00:20:07,760
Speaker 4: they will be certainly very eager to consume APIs from

490
00:20:07,800 --> 00:20:10,160
Speaker 4: other banks so that their customers get the best experience.

491
00:20:10,320 --> 00:20:12,200
Speaker 1: Right, But who's going to show the cards first? Kind

492
00:20:12,200 --> 00:20:12,400
Speaker 1: of thing?

493
00:20:12,560 --> 00:20:15,119
Speaker 4: Yeah, And look, I think we'll see an interesting space

494
00:20:15,200 --> 00:20:16,040
Speaker 4: evolved next year.

495
00:20:17,280 --> 00:20:19,480
Speaker 1: I guess at some point is this, like you know,

496
00:20:19,880 --> 00:20:22,000
Speaker 1: agentic AI that kind of stuff is serially going to

497
00:20:22,040 --> 00:20:24,000
Speaker 1: take all this sort of stuff with an API for

498
00:20:24,119 --> 00:20:26,840
Speaker 1: me or as you know, do your hand that agency over

499
00:20:26,840 --> 00:20:27,560
Speaker 1: to somebody else.

500
00:20:27,800 --> 00:20:29,359
Speaker 3: Yeah, I don't think so.

501
00:20:29,560 --> 00:20:32,840
Speaker 4: Like I still think money and your finances are still

502
00:20:33,320 --> 00:20:37,520
Speaker 4: you know, a pretty important part of your life obviously,

503
00:20:37,640 --> 00:20:39,760
Speaker 4: and there's a lot of trust that goes with that,

504
00:20:39,760 --> 00:20:41,920
Speaker 4: that's built up over a long period of time. And look,

505
00:20:41,960 --> 00:20:46,399
Speaker 4: banks still have a credible and a well earned amount

506
00:20:46,440 --> 00:20:49,840
Speaker 4: of trust in society. Now you might you might sort

507
00:20:49,880 --> 00:20:51,920
Speaker 4: of you know, have an opinion on whether banks should

508
00:20:51,920 --> 00:20:54,160
Speaker 4: be owned by offshore entities and all those sorts of things.

509
00:20:54,200 --> 00:20:56,720
Speaker 4: But that's beside the point. They do look after your

510
00:20:56,720 --> 00:20:58,680
Speaker 4: money well, and they know how to secure your data,

511
00:20:58,720 --> 00:21:00,439
Speaker 4: and they do a really good job at that. And

512
00:21:00,520 --> 00:21:02,960
Speaker 4: so you know, I think there's a lot of interesting

513
00:21:03,720 --> 00:21:07,000
Speaker 4: spaces that will evolve outside of that. But ultimately, you

514
00:21:07,000 --> 00:21:09,440
Speaker 4: know where do your dollars sit, and you know who

515
00:21:09,440 --> 00:21:13,080
Speaker 4: holds onto them, and who you too, do you trust to. Ultimately,

516
00:21:13,600 --> 00:21:15,359
Speaker 4: you know, give one hundred dollars and know that you're

517
00:21:15,400 --> 00:21:17,480
Speaker 4: going to get the hundred dollars back when you need it.

518
00:21:17,480 --> 00:21:18,800
Speaker 3: It's always going to be a bank.

519
00:21:20,359 --> 00:21:23,639
Speaker 1: Sounds amazing. You've never worked in a bank though yourself.

520
00:21:23,680 --> 00:21:25,240
Speaker 3: I haven't worked in a bank. I worked for zero.

521
00:21:26,119 --> 00:21:27,639
Speaker 1: You blagged your way in there, didn't you. I did,

522
00:21:27,720 --> 00:21:29,600
Speaker 1: be honest. Can we hear that story please? I heard

523
00:21:29,600 --> 00:21:29,920
Speaker 1: it once.

524
00:21:30,040 --> 00:21:31,200
Speaker 3: I was working.

525
00:21:31,520 --> 00:21:33,560
Speaker 4: I grew up down south and Nar a town down

526
00:21:33,560 --> 00:21:35,080
Speaker 4: in the South Island, and I was working on a

527
00:21:35,080 --> 00:21:36,280
Speaker 4: golf course at the time.

528
00:21:36,080 --> 00:21:37,840
Speaker 1: And family business.

529
00:21:37,840 --> 00:21:40,080
Speaker 3: I understand it was a family business. And I.

530
00:21:41,640 --> 00:21:43,240
Speaker 4: Got a wife and kids and a mortgage, as you

531
00:21:43,320 --> 00:21:45,399
Speaker 4: tend to do, and I thought, well, this actually my

532
00:21:45,400 --> 00:21:47,600
Speaker 4: wife made me, let's be honest, She told me that

533
00:21:47,640 --> 00:21:49,000
Speaker 4: I need to go and get a real job. So

534
00:21:49,600 --> 00:21:51,800
Speaker 4: I thought, I was always interested in technology and I

535
00:21:51,800 --> 00:21:55,160
Speaker 4: didn't have any qualifications. I would sort of build websites

536
00:21:55,200 --> 00:21:57,800
Speaker 4: on the side. This is back in twenty twelve thirteen,

537
00:21:58,720 --> 00:22:01,560
Speaker 4: and so I thought I need to I always i'd

538
00:22:01,560 --> 00:22:04,320
Speaker 4: sort of started building what now became a carho back

539
00:22:04,400 --> 00:22:06,919
Speaker 4: way back then. Even i'd sort of reverse engineer access

540
00:22:06,920 --> 00:22:08,560
Speaker 4: into my own bank account so I could move money

541
00:22:08,600 --> 00:22:11,560
Speaker 4: around automatically to avoid ASP's overdraft fees at the time,

542
00:22:12,359 --> 00:22:13,920
Speaker 4: and I thought, well, actually, if I want to do

543
00:22:13,960 --> 00:22:15,800
Speaker 4: something with us, I need to go and learn from someone.

544
00:22:15,800 --> 00:22:18,200
Speaker 4: And at the time Zero was obviously just taking off,

545
00:22:18,359 --> 00:22:21,879
Speaker 4: and so I sort of stumbled across a tweet that

546
00:22:22,000 --> 00:22:24,720
Speaker 4: Rod Drury had said, the founder and CEO of Zero,

547
00:22:25,720 --> 00:22:28,080
Speaker 4: and I mocked something up and I sent it to him,

548
00:22:28,119 --> 00:22:30,760
Speaker 4: and thirty minutes later he kind of offered me a

549
00:22:30,800 --> 00:22:32,480
Speaker 4: job sort of thing. And so I moved to Wellington

550
00:22:32,560 --> 00:22:36,080
Speaker 4: and worked for Zero. And look, Rod's someone that appreciates

551
00:22:36,760 --> 00:22:39,600
Speaker 4: innovation more than anyone, right and doing things differently and

552
00:22:40,000 --> 00:22:41,080
Speaker 4: sort of sticking your neck.

553
00:22:40,960 --> 00:22:43,040
Speaker 1: Out for you went into it, and I don't actually

554
00:22:43,040 --> 00:22:44,679
Speaker 1: want to work there. I want to learn how you

555
00:22:44,720 --> 00:22:45,080
Speaker 1: guys do.

556
00:22:45,240 --> 00:22:46,800
Speaker 4: My dad and I remember telling him, you know, like,

557
00:22:46,880 --> 00:22:48,520
Speaker 4: I'll be here for maybe twelve months, eighty months, and

558
00:22:48,520 --> 00:22:50,160
Speaker 4: I'll learn as much as I can. He probably laughed

559
00:22:50,560 --> 00:22:52,639
Speaker 4: whatever make But yeah, that was always my goal to

560
00:22:52,640 --> 00:22:54,520
Speaker 4: go and learn from, you know, at the time, the

561
00:22:54,520 --> 00:22:57,800
Speaker 4: New Zealand's best and sort of understand how sas works

562
00:22:57,840 --> 00:22:59,400
Speaker 4: and how you build a product and how you get

563
00:22:59,440 --> 00:23:01,960
Speaker 4: customers and your market and all those things. And so

564
00:23:02,080 --> 00:23:04,360
Speaker 4: after that that point of around about eighty months as well,

565
00:23:04,520 --> 00:23:06,040
Speaker 4: I was able to sort of I went and did

566
00:23:06,080 --> 00:23:07,480
Speaker 4: a little bit of time at E Road, which is

567
00:23:07,480 --> 00:23:09,919
Speaker 4: a company up here in Auckland, and then I got

568
00:23:09,960 --> 00:23:11,760
Speaker 4: to a point where I could raise money for essentially

569
00:23:11,760 --> 00:23:13,960
Speaker 4: what I'm doing now and where you.

570
00:23:13,920 --> 00:23:15,679
Speaker 1: Go, do you feel like your patients is being real?

571
00:23:15,880 --> 00:23:18,960
Speaker 4: It's been an overnight, you know, ten year overnight success,

572
00:23:18,760 --> 00:23:20,919
Speaker 4: as a lot of people would say, and you know,

573
00:23:21,359 --> 00:23:23,320
Speaker 4: it's one of those things. If I'd known how long

574
00:23:23,359 --> 00:23:26,040
Speaker 4: the regulation would tach, which we always knew we would

575
00:23:26,119 --> 00:23:28,120
Speaker 4: need that regulation to get the tail and to get

576
00:23:28,119 --> 00:23:31,360
Speaker 4: these sort of past the early adopters, I didn't think

577
00:23:31,359 --> 00:23:33,520
Speaker 4: it would take ten years. I mean, I think I

578
00:23:33,560 --> 00:23:36,240
Speaker 4: was counting up the other day. It's eight Consumer and

579
00:23:36,240 --> 00:23:39,360
Speaker 4: Commerce Affairs ministers later. We've ended up with some really

580
00:23:39,400 --> 00:23:42,840
Speaker 4: good regulations that should enable the network and consumer data

581
00:23:42,920 --> 00:23:45,920
Speaker 4: right to grow. But it's like it, I mean, most

582
00:23:45,920 --> 00:23:47,480
Speaker 4: people would say, if you knew what you were getting

583
00:23:47,480 --> 00:23:48,760
Speaker 4: into when you started, would just do it.

584
00:23:48,800 --> 00:23:51,719
Speaker 3: And most people probably said, nah, I'll get a job

585
00:23:51,760 --> 00:23:52,080
Speaker 3: at a bank.

586
00:23:52,119 --> 00:23:55,639
Speaker 1: Maybe forty years from now, what's it going to look like?

587
00:23:55,720 --> 00:23:57,800
Speaker 1: Any ideas I touched?

588
00:23:57,840 --> 00:23:59,919
Speaker 3: And that's far too long to push out in too.

589
00:24:01,000 --> 00:24:03,520
Speaker 4: With everything going on technology at the moment, there will

590
00:24:03,560 --> 00:24:06,760
Speaker 4: be a lot more competition, there'll be a lot more

591
00:24:07,359 --> 00:24:11,680
Speaker 4: compelling reasons to switch providers. But I still think we're

592
00:24:11,680 --> 00:24:14,320
Speaker 4: a small country, and you know, with a cap of

593
00:24:14,359 --> 00:24:17,359
Speaker 4: five million odd people, there's only so much innovation and

594
00:24:17,520 --> 00:24:20,879
Speaker 4: so many financial products that can come to a market

595
00:24:20,920 --> 00:24:23,520
Speaker 4: the size, just because of the limit of that ceiling.

596
00:24:23,640 --> 00:24:26,240
Speaker 4: And so you know, it's unlikely that some of the

597
00:24:26,240 --> 00:24:30,840
Speaker 4: big overseas kind of fintech banks really have a market

598
00:24:30,840 --> 00:24:33,520
Speaker 4: share here because there's just there's just not enough people here.

599
00:24:34,000 --> 00:24:36,359
Speaker 4: And so I think, you know, one of the things

600
00:24:36,359 --> 00:24:39,040
Speaker 4: that will be interesting over the next forty years. Is

601
00:24:39,040 --> 00:24:40,800
Speaker 4: that you know where in New Zealand decides to play

602
00:24:40,800 --> 00:24:43,560
Speaker 4: in terms of do we want to remain a small

603
00:24:43,560 --> 00:24:46,040
Speaker 4: island in the South Pacific with five million people? Or

604
00:24:46,240 --> 00:24:48,159
Speaker 4: you know, do we have the capacity to get to

605
00:24:48,520 --> 00:24:51,760
Speaker 4: thirty or forty million people which enable everything else on

606
00:24:51,840 --> 00:24:54,199
Speaker 4: top of it. But you know who knows where that

607
00:24:54,320 --> 00:24:56,760
Speaker 4: ends up. You know that's well above my pay grade.

608
00:24:56,840 --> 00:24:58,240
Speaker 1: A lot of traffic in the arrow Town.

609
00:24:58,080 --> 00:24:59,480
Speaker 3: There would be a lot of traff there already is

610
00:24:59,480 --> 00:24:59,960
Speaker 3: a lot of traffic.

611
00:25:00,280 --> 00:25:05,600
Speaker 1: Eric been It's been fascinating hearing your passion for something

612
00:25:05,640 --> 00:25:07,840
Speaker 1: that most people probably don't even want to think about,

613
00:25:08,040 --> 00:25:11,680
Speaker 1: but will actually potentially change how they look at their money,

614
00:25:11,720 --> 00:25:14,920
Speaker 1: how they handle their finances, and how they transact It's

615
00:25:14,960 --> 00:25:17,800
Speaker 1: pretty fascinating. I hope you enjoyed the chance to share

616
00:25:17,840 --> 00:25:19,200
Speaker 1: some of that, and I hope you all enjoyed the

617
00:25:19,280 --> 00:25:22,560
Speaker 1: chance to listen and watch, whether you're watching on YouTube

618
00:25:22,640 --> 00:25:24,359
Speaker 1: or listening on any of the apps straight off the

619
00:25:24,359 --> 00:25:26,920
Speaker 1: Shares's app, iHeart wherever you get it from. That was

620
00:25:26,960 --> 00:25:27,920
Speaker 1: shared lunch Quama to