WEBVTT - Will sharing data really improve banking? Yes 0:00:00.800 --> 0:00:04.040 Open banking is here, or at least the first real 0:00:04.120 --> 0:00:06.600 version of it, with New Zealand's four biggest banks and 0:00:06.800 --> 0:00:10.040 zed ASB B and Z and Westpac now required to 0:00:10.080 --> 0:00:13.680 share the customer's data with trusted third parties with the 0:00:13.680 --> 0:00:15.000 customer's authorization. 0:00:15.080 --> 0:00:18.280 Of course, it promises to open up innovation in everything 0:00:18.360 --> 0:00:21.919 from faster, more convenient retail and e commerce payments to 0:00:22.000 --> 0:00:24.079 new budgeting and investment apps. 0:00:24.480 --> 0:00:26.040 It could take a lot of hassle out of the 0:00:26.079 --> 0:00:28.760 process of applying for a loan or mortgage, but. 0:00:28.800 --> 0:00:32.800 Will open banking really unlock the competition our highly concentrated 0:00:32.840 --> 0:00:35.760 and vastly profitable banking sector needs. 0:00:36.080 --> 0:00:38.280 This week on the Business of Tech powered by two 0:00:38.280 --> 0:00:41.960 Degrees Business, we took to two entrepreneurs on the frontlines 0:00:42.040 --> 0:00:46.000 of open banking, hoping to take advantage of regulatory changes 0:00:46.040 --> 0:00:50.199 to increase choice and competition in financial services. 0:00:49.880 --> 0:00:52.600 And the UK, it took a while for uptake off 0:00:52.600 --> 0:00:55.640 the open banking regime and certainly the same in Australia. 0:00:56.320 --> 0:00:58.400 I think New Zealand's going to be much faster. The 0:00:58.720 --> 0:01:01.920 customer product data built was really well designed and an 0:01:01.960 --> 0:01:04.920 our view as a stands today is going to be great. 0:01:04.800 --> 0:01:07.680 Eventually woman that was comin foundation later that everyone can 0:01:07.920 --> 0:01:10.440 build upon and you can start thinking about, well, what 0:01:10.560 --> 0:01:12.760 of the care you make the lines that could really 0:01:12.840 --> 0:01:16.760 generate value, Like we're actually solving a problem that's value where. 0:01:16.560 --> 0:01:19.240 People are willing to pay for more on open banking. 0:01:19.360 --> 0:01:22.600 Coming up with our featured guests Blink Pays, Adrian Smith 0:01:22.680 --> 0:01:25.240 and AKA Who's Josh Daniel shortly, but. 0:01:25.240 --> 0:01:27.160 First we look at some of the big tech stories 0:01:27.319 --> 0:01:30.120 making headlines this week, and we start with Harold Tech 0:01:30.280 --> 0:01:34.119 editor Chris Keel's Tech Insider piece very interesting about Soul 0:01:34.240 --> 0:01:39.319 Machines are really promising, New Zealand's startup founded by Greg 0:01:39.400 --> 0:01:43.560 Cross and Mark Sagar. And just as a bit of background, 0:01:43.800 --> 0:01:47.039 Soul Machines came up with what they call it a 0:01:47.120 --> 0:01:50.120 digital brain. This was Mark Saga who came out of 0:01:51.080 --> 0:01:54.600 where a digital So the idea was to take this 0:01:54.800 --> 0:01:59.160 incredible intelligence they created and use it to feed digital 0:01:59.240 --> 0:02:04.200 avatars that could have really sensible conversations in a customer 0:02:04.360 --> 0:02:07.840 service context. So we saw a lot of pilot projects 0:02:07.880 --> 0:02:10.799 pop up with the likes of A and Z and 0:02:11.040 --> 0:02:14.880 Mercedes bend And in New Zealand, and it appears as 0:02:14.960 --> 0:02:19.480 though both those founders, Greg cross Mark Sager are actually 0:02:19.520 --> 0:02:21.160 gone from Soul Machines. 0:02:20.840 --> 0:02:25.840 Bin Yeah, operationally and the directorship. They've both stepped back. 0:02:26.160 --> 0:02:30.000 They're on an advisory role now, whatever you want to 0:02:30.040 --> 0:02:33.959 make of that. If you are adjacent to the industry 0:02:34.040 --> 0:02:36.320 as we are, you're kind of would have been hearing 0:02:36.320 --> 0:02:40.640 these rumblings around Soul Machines for some time now that 0:02:40.760 --> 0:02:43.320 it seems to have been struggling to find its feet 0:02:43.360 --> 0:02:45.480 in the new world of AI. And that's kind of 0:02:45.520 --> 0:02:48.680 what Chris Keel's story goes into the details of what 0:02:48.800 --> 0:02:53.360 actually seems to have happened there. The question is that 0:02:53.520 --> 0:02:57.120 people are asking is whether they were kind of disrupted 0:02:57.160 --> 0:03:01.160 by generative AI, or whether they the tech was actually 0:03:01.600 --> 0:03:04.800 more flash than bang, whether it actually seemed like it 0:03:04.880 --> 0:03:06.639 was going to be really valuable to a lot of 0:03:06.680 --> 0:03:09.880 consumers but ultimately just wasn't really what people were looking 0:03:09.960 --> 0:03:11.079 for or weren't ready for. 0:03:11.160 --> 0:03:15.280 Perhaps, and I was sort of expecting by now we 0:03:15.360 --> 0:03:18.720 would be interacting with these digital avatars which you can 0:03:18.760 --> 0:03:22.519 actually see rather than just talk to, like Siri or Alexa. 0:03:22.680 --> 0:03:25.680 I thought they'd be everywhere now, but they're not. And 0:03:26.280 --> 0:03:30.280 in the intervening few years since Solar Machines really got 0:03:30.320 --> 0:03:34.040 going on these digital avatars. We've seen the rise of 0:03:34.120 --> 0:03:38.520 generative AI, which Solar Machines has embraced. So they are 0:03:38.640 --> 0:03:43.000 using chat GPT to power some of their sort of 0:03:43.000 --> 0:03:46.120 off the shelf bots that you can buy relatively cheaply 0:03:46.160 --> 0:03:49.400 to run your customer service. The big question mark is 0:03:49.440 --> 0:03:53.040 over the digital brain technology. Is it too expensive, is 0:03:53.080 --> 0:03:58.120 it too cumbersome to use? Is it actually still valuable? 0:03:58.200 --> 0:04:01.640 And it may well be, but so Machines appear to 0:04:01.800 --> 0:04:04.120 be running out of money. You wrote a story this 0:04:04.200 --> 0:04:08.320 week looking at the financial statements. They've got cash and 0:04:08.400 --> 0:04:12.080 TERMB deposits of twelve point three million dollars with net 0:04:12.120 --> 0:04:15.280 cash outflows of thirty eight point one million for the 0:04:15.360 --> 0:04:17.080 year ending March thirty one. 0:04:17.360 --> 0:04:20.000 Yeah, that was last year, twenty twenty three, So that 0:04:20.040 --> 0:04:22.920 was what they had then and it's been twelve months 0:04:22.960 --> 0:04:25.680 since then. That that's probably why they've reduced their head 0:04:25.680 --> 0:04:28.880 count from two hundred and fifty three to seventy in 0:04:28.960 --> 0:04:29.520 that time. 0:04:29.839 --> 0:04:33.360 And we haven't heard anything about a significant new injection 0:04:33.400 --> 0:04:34.200 of funding, have we? 0:04:34.640 --> 0:04:35.000 No? 0:04:35.000 --> 0:04:37.240 No, And again in that in Chris Kill's article he 0:04:37.279 --> 0:04:39.640 talks about them potentially it looks like they've tried to 0:04:40.279 --> 0:04:43.200 whether that was not as successful as they hoped, or 0:04:43.400 --> 0:04:47.000 whether they couldn't quite get that off the ground, it's 0:04:47.040 --> 0:04:50.120 not really obvious to us what actually happened. So yeah, 0:04:50.200 --> 0:04:52.560 keeping an eye on things, and hopefully we'll hear something 0:04:52.680 --> 0:04:57.080 a little more detailed from either the company's new CEO 0:04:57.360 --> 0:05:02.200 or somebody soon, because they're keeping their cards very close 0:05:02.240 --> 0:05:03.400 to their chest at the moment. 0:05:03.560 --> 0:05:06.320 I'd love to see this company really succeed in its 0:05:06.560 --> 0:05:12.160 original mission, which sounded fantastic and drew on some great technology, 0:05:12.160 --> 0:05:14.080 and they've put a lot of work into this all 0:05:14.120 --> 0:05:17.520 the way since twenty sixteen, I think when they set 0:05:17.560 --> 0:05:21.600 out on this venture. But is this unfortunately going to 0:05:21.640 --> 0:05:26.680 be a victim of this disruptive generative AI revolution where 0:05:26.960 --> 0:05:30.520 things that were very expensive and complex to create with 0:05:30.960 --> 0:05:34.400 suddenly with natural language processing and large language models and 0:05:34.560 --> 0:05:38.760 training those models, you can arrive at something as good 0:05:39.400 --> 0:05:41.400 for a fraction of the price. That's the concern. 0:05:41.800 --> 0:05:44.400 You also have to look at just the cost to 0:05:44.600 --> 0:05:49.040 open AI of training those models. It's billions of dollars, 0:05:49.200 --> 0:05:53.680 and did zull Machine ever have those kinds of Microsoft 0:05:53.760 --> 0:05:57.039 level pockets to be able to do something that would 0:05:57.080 --> 0:06:03.320 ever challenge that level. They didn't really, but yeah, it 0:06:03.400 --> 0:06:07.600 is difficult to know how big the general audience is 0:06:07.800 --> 0:06:11.839 for face to face chatbots. Like I struggle to see 0:06:11.880 --> 0:06:15.839 the value. And I was speaking to a former podcast guest, 0:06:15.960 --> 0:06:17.840 Tim Warren the other day about this, and one of 0:06:17.880 --> 0:06:19.920 the things he said to me, it's difficult when you're 0:06:19.960 --> 0:06:21.880 facing a generation that doesn't even want to pick up 0:06:21.920 --> 0:06:24.480 the phone and have a call to try and convince 0:06:24.520 --> 0:06:26.719 them to have conversations with digital people. 0:06:27.240 --> 0:06:30.520 Yeah. And we were at an event with the Amazon 0:06:30.760 --> 0:06:35.040 Australia New Zealand people last week and I was asking 0:06:35.120 --> 0:06:37.400 one of them when to Genai sort of coming to 0:06:37.480 --> 0:06:41.080 the Alexa, and they said, it is coming, you know, 0:06:41.200 --> 0:06:43.440 watch out, it's not far away. So that will be 0:06:43.480 --> 0:06:45.719 the big test. I think at the moment they're not 0:06:45.800 --> 0:06:49.760 very useful those voice assistants really for anything other than 0:06:50.400 --> 0:06:54.000 asking what the weather is or what's in my calendar. 0:06:54.160 --> 0:06:57.400 But if they can use those large language models to 0:06:57.480 --> 0:07:02.240 deliver much more lifelike and an intuitive answers to less 0:07:02.240 --> 0:07:05.800 structured questions, that will be a game changer. But do 0:07:05.839 --> 0:07:09.080 I need a digital representation of a person on a 0:07:09.120 --> 0:07:14.360 screen fronting that for me personally. No, maybe millennials and 0:07:14.440 --> 0:07:17.160 gen z don't give us stuff about that. They just 0:07:17.200 --> 0:07:20.040 want to get a really good answer to their question, 0:07:20.600 --> 0:07:22.400 and if it's speaking into their phone, they're happy to 0:07:22.440 --> 0:07:22.680 do it. 0:07:23.040 --> 0:07:23.360 Yeah. 0:07:23.440 --> 0:07:25.040 And the other thing I guess is that you know, 0:07:25.080 --> 0:07:28.160 there was a lot of hype for the metaverse that 0:07:28.200 --> 0:07:30.800 some machines tried to ride there for a while, but 0:07:31.040 --> 0:07:36.240 unfortunately that was a hype train without rails and didn't 0:07:36.280 --> 0:07:36.960 gat very far. 0:07:37.920 --> 0:07:42.880 Yeah. Looking a bit more broadly at AI, interesting report 0:07:43.120 --> 0:07:47.400 from Judith Collin's office as the Minister of Science, Technology 0:07:47.440 --> 0:07:50.440 and Innovation starting to give us a little bit of 0:07:50.520 --> 0:07:53.480 an idea as to where she is directing the government 0:07:53.480 --> 0:07:58.280 to take artificial intelligence, both from a regulation point of view, 0:07:58.280 --> 0:08:00.440 but also trying to promote update offen. 0:08:01.160 --> 0:08:05.560 Yeah, they proactively released a cabinet paper that Judith Collins 0:08:05.600 --> 0:08:09.400 submitted basically talking about how she wants to try and 0:08:09.480 --> 0:08:13.160 get New Zealand using AI. A big part of it 0:08:13.200 --> 0:08:16.600 for the private industry is that she they basically want 0:08:16.600 --> 0:08:19.560 to say, don't be stressed about future regulations. 0:08:19.600 --> 0:08:21.160 You can go and start playing now. 0:08:21.440 --> 0:08:23.320 We're going to take a light touch regulation and if 0:08:23.360 --> 0:08:26.360 anything crops up outside of the current legal frameworks. 0:08:26.400 --> 0:08:27.920 Then we'll address that when it happens. 0:08:28.520 --> 0:08:31.320 So maybe that will have the intended effect and get 0:08:31.400 --> 0:08:33.839 people a little bit more excited to dive in and 0:08:33.960 --> 0:08:37.840 use it. I don't know if anybody was sitting there 0:08:37.840 --> 0:08:40.880 with their finger hovering over a button just waiting for 0:08:40.920 --> 0:08:44.600 the regulatory nod from government or not, but maybe they were. 0:08:45.360 --> 0:08:47.800 So this really carries on to theme I think from 0:08:48.160 --> 0:08:51.959 the National Party and then with Judith Collins as sort 0:08:51.960 --> 0:08:56.480 of Technology Minister and really passionate about AI light touch, 0:08:57.480 --> 0:09:02.240 risk based approach to AIG, which is what the EU 0:09:02.360 --> 0:09:05.640 has done, but what will happen here nowhere near is prescriptive? 0:09:05.960 --> 0:09:09.520 That makes sense to me, but there's just a lot 0:09:09.559 --> 0:09:13.480 of gray areas in our privacy law and our copyright law, 0:09:13.640 --> 0:09:19.240 and what she's basically saying is where existing legislation can 0:09:19.280 --> 0:09:24.000 deal with this, we will build on that if things 0:09:24.000 --> 0:09:26.760 need to be tweaked, but we're not really looking at 0:09:26.840 --> 0:09:30.400 a whole new regime which some countries and the European 0:09:30.480 --> 0:09:33.840 Union have actually gone and introduced. So she's signaling very 0:09:33.920 --> 0:09:36.280 much we're not going to be as heavy handed on that. 0:09:36.720 --> 0:09:39.520 I guess the other thing the paper flags is a 0:09:39.640 --> 0:09:45.000 role for GCD government chief Digital Officer who we had 0:09:45.040 --> 0:09:47.719 on the show back last year. Paul James is in 0:09:47.840 --> 0:09:53.119 that role at the moment. She's basically signaling to that office, 0:09:53.320 --> 0:09:55.520 we need to get the ball rolling here. You're going 0:09:55.559 --> 0:09:58.320 to coordinate things across government when it comes to the 0:09:58.440 --> 0:09:59.400 uptake of AI. 0:10:00.160 --> 0:10:00.360 Yep. 0:10:00.440 --> 0:10:04.520 She refers to strong leadership as needed, and I guess 0:10:04.520 --> 0:10:08.280 she is putting her faith in Paul James to be 0:10:08.400 --> 0:10:12.040 that strong leader and to maybe establish a strong leadership 0:10:12.080 --> 0:10:15.760 team as well hopefully that can get together and do this. 0:10:16.160 --> 0:10:20.079 She wants to get all the different portfolios to basically 0:10:20.120 --> 0:10:22.920 come back and offer some ideas about how they could 0:10:22.960 --> 0:10:27.480 potentially use artificial intelligence to improve the public services that 0:10:27.520 --> 0:10:31.400 they offer, and then put those together and create a 0:10:31.440 --> 0:10:36.080 cross portfolio working group headed by the Chief Digital Officer 0:10:36.320 --> 0:10:40.800 to start getting that together basically to start thinking about 0:10:40.840 --> 0:10:45.120 how they could possibly integrate some AI to improve public services. 0:10:45.160 --> 0:10:48.160 So it's a start, you know, it is a start, 0:10:48.240 --> 0:10:52.920 and hopefully it doesn't end up in bureaucratic quagmire. 0:10:53.440 --> 0:10:59.120 Yeah, relatively little in there about how to really jump 0:10:59.200 --> 0:11:03.200 start use of AI across the economy in a private sector. 0:11:03.640 --> 0:11:06.400 I think they just haven't really got to grips with 0:11:06.480 --> 0:11:09.679 how sort of mb AS, the agency responsible for that 0:11:09.720 --> 0:11:13.040 sort of stuff, would go about it. Other countries have 0:11:13.160 --> 0:11:16.120 set up, for instance, the National Center for AI and 0:11:16.160 --> 0:11:19.880 Australia to really push that along. The UK is going 0:11:19.920 --> 0:11:22.959 big on that, as is the us SO question Mike 0:11:23.040 --> 0:11:25.480 over that, particularly when we don't really have a strong 0:11:25.600 --> 0:11:29.640 digital strategy at the moment. There is other stuff that 0:11:29.760 --> 0:11:32.360 is happening that is useful. The AI Forum put out 0:11:32.360 --> 0:11:37.040 their Blueprint for AI in r Tauro last week, so 0:11:37.200 --> 0:11:40.600 I think that's good and they suggested a handful of 0:11:41.280 --> 0:11:45.200 industries we should really focus on for AI. So and 0:11:45.240 --> 0:11:48.800 maybe that's the more appropriate place for that to come from, 0:11:48.840 --> 0:11:51.199 which is them to tell government, if you really want 0:11:51.200 --> 0:11:53.959 to help us, this is the areas you should focus on. 0:11:54.480 --> 0:11:57.200 Another interesting report out last week from the Institute of 0:11:57.240 --> 0:12:03.720 Directors really useful guide for governing AI boards and business 0:12:03.800 --> 0:12:08.439 leaders actually incorporating it into their existing frameworks for governance 0:12:08.520 --> 0:12:10.880 rather than trying to create a whole new one. So 0:12:11.320 --> 0:12:13.520 there's pragmatic stuff. There's a lot of good stuff actually 0:12:13.600 --> 0:12:17.720 happening in New Zealand. It's probably not happening quickly enough. 0:12:17.760 --> 0:12:20.880 To enable what we need to make the most of 0:12:20.960 --> 0:12:23.640 this technology. But in some ways it's good that we're 0:12:23.720 --> 0:12:26.679 just not under public pressure or some need to do 0:12:26.720 --> 0:12:29.840 something jumping straight to regulation that may not be fit 0:12:29.880 --> 0:12:31.000 for purpose down to track. 0:12:31.600 --> 0:12:33.720 Yeah it's a slow start, but it's a start. 0:12:34.000 --> 0:12:38.720 Now. Open banking quietly arrived officially on May thirty, with 0:12:38.800 --> 0:12:42.240 our four big banks now required to run secure channels 0:12:42.280 --> 0:12:46.360 to third parties such as FinTechs and online retailers, allowing 0:12:46.480 --> 0:12:49.400 customer account and transaction data to be shared. 0:12:49.640 --> 0:12:52.280 It's a real milestone for the fintech sector, which is 0:12:52.320 --> 0:12:55.440 looking at the huge profitability of our big banks and 0:12:55.480 --> 0:12:58.679 seeing ample scope. It takes some market share, if not 0:12:58.720 --> 0:13:01.920 in the core business of taking deposits and issuing loans, 0:13:02.240 --> 0:13:05.440 at least in the financial services that wrap around the banks, 0:13:05.720 --> 0:13:07.079 such as online payments. 0:13:07.720 --> 0:13:10.800 We've been slow to join the open banking party. Other 0:13:10.880 --> 0:13:14.600 countries are frankly way ahead, but finally been we seem 0:13:14.640 --> 0:13:19.880 to have progress on open banking APIs or application programming interfaces, 0:13:19.920 --> 0:13:23.720 with the Big four playing ball and Kiwi Bank also 0:13:23.840 --> 0:13:27.520 set to join the open banking regime from twenty twenty six. 0:13:28.320 --> 0:13:29.600 Yeah, it's coming. 0:13:29.760 --> 0:13:33.600 It's finally kind of here in a way, it's really 0:13:33.679 --> 0:13:37.840 relying on the Consumer Product Bill which was recently read 0:13:37.880 --> 0:13:42.360 before it actually gets into force legislatively. But Payments in 0:13:42.360 --> 0:13:44.600 New Zealand and its API center have actually been doing 0:13:44.640 --> 0:13:48.320 quite a good job at pushing ahead with the kind 0:13:48.320 --> 0:13:52.079 of with the legislation there in the in the background, 0:13:52.440 --> 0:13:55.439 saying it's coming, so let's get working on it now. 0:13:55.440 --> 0:13:58.440 And they're the ones that have set these timeframes just 0:13:58.520 --> 0:14:01.079 for the big four banks moment, but they do have 0:14:01.120 --> 0:14:04.200 about a ninety five percent share of the market in 0:14:04.280 --> 0:14:07.400 New Zealand, so it's pretty pretty dominant anyway. 0:14:07.760 --> 0:14:09.680 So take us through this ben there are a whole 0:14:09.720 --> 0:14:13.400 bunch of startups out there that are just chomping at 0:14:13.400 --> 0:14:18.360 the bit to get hold of customer data from banks 0:14:18.400 --> 0:14:22.200 in an accessible format that allows them to do what exactly. 0:14:22.240 --> 0:14:24.280 What are some of these companies and what are the 0:14:24.360 --> 0:14:27.760 sorts of services they're looking to jump on the open 0:14:28.040 --> 0:14:30.720 banking bandwagon to deliver to kiwis. 0:14:30.760 --> 0:14:33.160 You've got the likes of blink pay, who we're going 0:14:33.240 --> 0:14:36.880 to speak to Adrian Smith shortly from blink pay quick Pay. 0:14:37.240 --> 0:14:41.200 They similar to blink pay, where they are a payments provider, 0:14:41.400 --> 0:14:45.880 so they can allow merchants to quickly and easily take 0:14:45.920 --> 0:14:50.320 payments directly from people's bank accounts using an API. You've 0:14:50.360 --> 0:14:53.800 got the likes of Akoho, So they're open banking, but 0:14:53.840 --> 0:14:56.280 they are actually not actually using APIs at the moment. 0:14:56.320 --> 0:14:58.360 You'll hear a bit about that from Josh Daniel in 0:14:58.440 --> 0:15:02.160 the conversation. They use an older form of open banking 0:15:02.280 --> 0:15:06.600 called screen scraping, which is a little bit controversial. And 0:15:06.640 --> 0:15:10.080 then you've got the likes of Pocketsmith. They help with budgeting. 0:15:10.240 --> 0:15:13.120 They provide you with insight into your bank accounts so 0:15:13.120 --> 0:15:15.080 you can see you where your money's being spent, and 0:15:15.160 --> 0:15:17.320 you can set budgets for things and do all kinds 0:15:17.320 --> 0:15:20.960 of clever stuff. So while it sounds kind of boring 0:15:21.040 --> 0:15:23.280 and dull and kind of like what's the point of 0:15:23.320 --> 0:15:26.600 it all, the reality is is that the banks have 0:15:26.840 --> 0:15:29.800 a huge amount of your data. This is data that 0:15:29.960 --> 0:15:32.960 is about you, about the stuff that you have been 0:15:33.000 --> 0:15:33.960 spending money on. 0:15:34.480 --> 0:15:37.760 We've sort of got Stockholm syndrome. I think in New Zealand. 0:15:37.760 --> 0:15:40.000 We've been told that, you know, you need to have 0:15:40.040 --> 0:15:43.640 a stable banking system, so they cane us on fees, 0:15:43.800 --> 0:15:45.800 but at least it's a stable system and your bank 0:15:45.880 --> 0:15:48.680 isn't going to collapse and take all your money. But 0:15:49.120 --> 0:15:51.440 the consequence of that is we just haven't seen the 0:15:51.480 --> 0:15:54.040 innovation in new services. It's not until you go to 0:15:54.080 --> 0:15:57.680 Singapore or China or even a UK and you go, 0:15:57.800 --> 0:16:00.240 my god, look at the diversity of players. They are 0:16:00.280 --> 0:16:04.160 bigger markets, but just the sorts of services that they're 0:16:04.200 --> 0:16:09.520 offering a lot of them at based, very accessible convenience 0:16:09.560 --> 0:16:12.600 services that we just don't really have here. And I 0:16:12.640 --> 0:16:15.760 think that's when people realize, wow, we're so far behind 0:16:15.760 --> 0:16:17.560 in New Zealand. We were ahead with f poss and 0:16:17.600 --> 0:16:19.880 that in the eighties, but we have slipped behind. So 0:16:21.080 --> 0:16:23.000 that's what we definitely need to address. That's what the 0:16:23.080 --> 0:16:27.040 legislation is aimed at. So here's Ben's interview with a 0:16:27.120 --> 0:16:30.880 car who's Josh Daniel and Blink Pays Adrian Smith. Who 0:16:30.920 --> 0:16:33.720 are really going to articulate for us exactly what the 0:16:33.720 --> 0:16:36.120 promises of open banking. 0:16:43.120 --> 0:16:47.000 Kyodo, Hello, welcome to the Business of Tech Josh and Adrian. 0:16:47.120 --> 0:16:49.040 How's it going well, Kyoder? 0:16:49.560 --> 0:16:52.760 Very good, good, Thank you so much for joining us. 0:16:52.840 --> 0:16:56.960 So you guys are both on the third party provider side, 0:16:56.960 --> 0:17:02.080 of this open banking progression that we've been slowly pushing 0:17:02.120 --> 0:17:05.640 towards over the last several years. So do you want 0:17:05.640 --> 0:17:08.560 to just very quickly give us a quick bit of 0:17:08.600 --> 0:17:12.440 information about what your companies do, Adrian, Oh. 0:17:12.400 --> 0:17:15.720 Yeah, absolutely, So blink pay we position ourselves as a 0:17:15.760 --> 0:17:18.199 paytech because that was the first thing that has been 0:17:18.200 --> 0:17:21.520 building open banking standards in the payment initiation APIs. But 0:17:21.600 --> 0:17:23.840 now the account information APIs are coming along, we're going 0:17:23.880 --> 0:17:26.959 to be repositioning ourselves as an integration player. And last 0:17:27.000 --> 0:17:29.200 so not too the similar to the work that are 0:17:29.200 --> 0:17:31.080 coding with Josh and Josh ok. 0:17:31.560 --> 0:17:35.720 Yeah. So Kahu is an open finance intermediary. We focus 0:17:35.880 --> 0:17:38.280 our work on the New Zealand market only, so we 0:17:38.440 --> 0:17:42.160 provide data integrations with New Zealand banks and other financial 0:17:42.240 --> 0:17:46.640 service providers. So what we do is enable people building 0:17:46.880 --> 0:17:51.639 consumer products to use a single API for access to 0:17:51.680 --> 0:17:54.439 those data integrations. And then there are other parts of 0:17:54.440 --> 0:17:57.440 our service that do things like transaction and Richmond other 0:17:57.520 --> 0:18:00.960 things like that that we think that at the Ushalaya. 0:18:01.119 --> 0:18:05.080 Cool, thanks so much. So API actually is what we're 0:18:05.080 --> 0:18:08.920 going to be starting a conversation with. So the technically 0:18:08.920 --> 0:18:12.320 it stands for Application Programming Interface, I believe. But what 0:18:12.359 --> 0:18:14.439 that basically means is it's a piece of software that 0:18:14.520 --> 0:18:16.600 allows two different pieces of software to. 0:18:16.680 --> 0:18:18.320 Share data kind of freely. 0:18:18.400 --> 0:18:22.520 That's an oversimplification obviously, but that's kind of been the 0:18:22.640 --> 0:18:25.879 main focus, I guess in recent times for open banking. 0:18:25.880 --> 0:18:29.879 On May thirty we saw one standard come in for APIs. 0:18:29.880 --> 0:18:32.720 We've got another one coming in November. So the May 0:18:32.760 --> 0:18:36.080 thirty one was about payments. So what has that offered 0:18:36.920 --> 0:18:41.080 in terms of capability for people who can plug into 0:18:41.119 --> 0:18:41.800 those APIs. 0:18:42.359 --> 0:18:45.040 Yes. So one of the really cool things about the 0:18:45.080 --> 0:18:49.119 Open Banking Paymentiation APIs is if you're connected to a 0:18:49.160 --> 0:18:53.600 third party, like a payment gateway, you can enable your 0:18:53.600 --> 0:18:56.760 customers to pay directly buy from their own bank accounts 0:18:56.840 --> 0:18:59.520 and you know, as an alternative means to using cards 0:18:59.520 --> 0:19:02.320 to make those payments in the e commerce space. And 0:19:02.359 --> 0:19:04.960 as a consequence, because we're going outside of the card 0:19:05.000 --> 0:19:08.600 scheme rails, the cost profile is materially lower than if 0:19:08.600 --> 0:19:10.439 you're going by the card schemes. And I'm sure we 0:19:10.480 --> 0:19:12.800 all recently saw that paper from ComCom that highlighted that 0:19:12.880 --> 0:19:17.840 Bees and MasterCard charge about ninety five billion annually in 0:19:17.920 --> 0:19:20.480 card payments and for the tune of about a billion 0:19:20.560 --> 0:19:22.959 dollars in fees. So the open banking standard and the 0:19:23.000 --> 0:19:25.879 fee structures with the banks are materially lower than that, 0:19:26.000 --> 0:19:28.720 and so we have the opportunity and ability to offer 0:19:29.119 --> 0:19:32.000 the everyday kiwis in New Zealanders a lower price point 0:19:32.040 --> 0:19:34.280 in order to process payments and not go into debt 0:19:34.359 --> 0:19:34.720 for that. 0:19:35.240 --> 0:19:38.360 Got cha, Josh, anything to add to that. 0:19:38.680 --> 0:19:41.080 I guess just to set the scene a little more, 0:19:41.680 --> 0:19:46.399 a car who operates with unregulated forms of open banking 0:19:46.720 --> 0:19:49.960 for the last three and a half years. We launched 0:19:50.040 --> 0:19:53.359 because we felt that the regulation was coming soon and 0:19:53.400 --> 0:19:56.119 it's taken longer than we expected. But the idea was, 0:19:56.800 --> 0:20:00.640 let's get things moving and evolve into the purpose built 0:20:00.640 --> 0:20:04.720 regulation which looks like is coming in New Zealand. So 0:20:04.800 --> 0:20:08.920 what we do is provide data and payment connectivity. And 0:20:08.960 --> 0:20:12.200 we have over fifty customers that made from governments, corporates 0:20:12.200 --> 0:20:17.000 to FinTechs, and that's a range of enduring data consents, 0:20:17.160 --> 0:20:20.800 one off data consents, and enduring payment consents. The only 0:20:20.840 --> 0:20:22.879 thing we don't do is a one off payment consent. 0:20:23.400 --> 0:20:26.880 So this first release on the thirtieth of May from 0:20:27.000 --> 0:20:29.919 the Big four Banks is a one off payment consent API, 0:20:30.119 --> 0:20:33.160 which is the only functionality that we don't provide, So 0:20:33.320 --> 0:20:36.280 this first release wasn't relevant to us that looking a 0:20:36.359 --> 0:20:39.320 head to the next release on thirtieth November, which was 0:20:39.320 --> 0:20:43.240 a one off and enduring data consent API, that is 0:20:43.280 --> 0:20:47.440 where for the Big four banks, their first release will 0:20:47.520 --> 0:20:50.040 enable functionality for we think at least six of our 0:20:50.080 --> 0:20:53.239 customers depending on what gets delivered in that release, out 0:20:53.280 --> 0:20:54.680 of the optional functionality. 0:20:56.160 --> 0:20:59.080 So what does that mean the data that it's going 0:20:59.119 --> 0:21:03.359 to be accessible? What is this transaction data that's supposedly 0:21:03.359 --> 0:21:03.960 so useful? 0:21:05.600 --> 0:21:07.960 So I think that the canonical example in New Zealand 0:21:08.080 --> 0:21:11.359 is zero, where if you use zero, you want your 0:21:11.520 --> 0:21:14.840 transaction data to be hooked up into the accounting software 0:21:15.080 --> 0:21:17.120 and you don't want to manually import it each time 0:21:17.160 --> 0:21:21.000 you want to do bank reconciliation and zero. So there's 0:21:21.000 --> 0:21:23.840 a whole lot of dasy use cases like that where 0:21:24.000 --> 0:21:26.840 you as a consumer might want to grant access to 0:21:26.880 --> 0:21:29.800 some third party service. So some of the common ones 0:21:29.840 --> 0:21:32.760 are budgeting tools. So if you allow your data to 0:21:32.800 --> 0:21:37.720 automatically flow in, a historical budget can be automatically generated 0:21:37.760 --> 0:21:40.520 and then you can extrapolate that forward to make budgeting 0:21:40.520 --> 0:21:43.160 more accessible and easier to tract to. You could do 0:21:43.440 --> 0:21:48.160 nit worth tracking, which basically aggregates the balances of your 0:21:48.160 --> 0:21:50.760 financial accounts and allows you to see that high level 0:21:50.840 --> 0:21:53.640 view of how you're tracking over time accounting and text 0:21:53.680 --> 0:21:56.000 as a really common one. One that's been in the 0:21:56.000 --> 0:22:00.560 news recently is Prosaic, which has a tool for business 0:22:00.560 --> 0:22:04.040 owners to find tax deductible expenses and then make it 0:22:04.080 --> 0:22:06.720 easier to similar to claim to IID. So all of 0:22:06.720 --> 0:22:11.720 these use cases require financial data. That's the customer's data, 0:22:12.320 --> 0:22:15.840 and what open banking does is make it autable or 0:22:15.880 --> 0:22:19.480 easily portable. And that could be a one off access 0:22:19.520 --> 0:22:21.480 to a third party, or it could be an ongoing 0:22:21.520 --> 0:22:24.760 access which people are familiar with from accounting software or 0:22:25.000 --> 0:22:26.320