WEBVTT - Korea's Kospi Tumbles as Valuation Concerns Hit Tech Stocks

0:00:02.520 --> 0:00:07.040
<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

0:00:11.160 --> 0:00:14.920
<v Speaker 2>Welcome to the Daybreak Asia podcast. I'm Doug Chrisner. In

0:00:14.960 --> 0:00:18.200
<v Speaker 2>the States, risk assets were sold down, with big cap

0:00:18.239 --> 0:00:21.120
<v Speaker 2>tech and cryptocurrencies bearing the brunt of the selling.

0:00:21.440 --> 0:00:21.560
<v Speaker 3>Now.

0:00:21.600 --> 0:00:24.400
<v Speaker 2>That drop came after a number of Wall Street executives

0:00:24.480 --> 0:00:27.159
<v Speaker 2>warned of a pullback in the equity market. At the

0:00:27.200 --> 0:00:30.240
<v Speaker 2>same time, the hedge fund manager Michael Burry placed a

0:00:30.360 --> 0:00:34.920
<v Speaker 2>one point one billion dollar bet against leading artificial intelligence

0:00:34.920 --> 0:00:38.120
<v Speaker 2>related stocks. For more on the market action, we caught

0:00:38.200 --> 0:00:41.840
<v Speaker 2>up with Anna Wou. She is cross asset investment specialist

0:00:42.120 --> 0:00:45.800
<v Speaker 2>at Vanek who spoke with Bloomberg TV host April Hong

0:00:45.960 --> 0:00:47.400
<v Speaker 2>and shry On and I.

0:00:47.479 --> 0:00:49.159
<v Speaker 1>Great to have you with us as we get the

0:00:49.159 --> 0:00:52.639
<v Speaker 1>Asian session started. We have already seen significant pressure over

0:00:52.680 --> 0:00:55.560
<v Speaker 1>in South Korea, for example, because of the Career Exchange

0:00:55.920 --> 0:00:59.680
<v Speaker 1>warning about s k Heinix, because of that incredible AI rolly.

0:01:00.080 --> 0:01:02.600
<v Speaker 1>Where are we in Asia when it comes to these

0:01:02.680 --> 0:01:05.080
<v Speaker 1>valuations of these high flying tech stocks.

0:01:08.000 --> 0:01:10.679
<v Speaker 3>Hello from Sydney and good to see you. I think

0:01:10.800 --> 0:01:13.800
<v Speaker 3>very much to your point. We had a five month

0:01:13.920 --> 0:01:18.000
<v Speaker 3>rally in AI thematic in the US and cross the board,

0:01:18.440 --> 0:01:21.280
<v Speaker 3>so the bar is simply just getting higher. So now

0:01:21.360 --> 0:01:25.640
<v Speaker 3>a modest earning speed does not translate into price reaction anymore.

0:01:26.480 --> 0:01:30.640
<v Speaker 3>To that point, the similar sentiment, I guess it's flowing

0:01:30.680 --> 0:01:33.520
<v Speaker 3>into the Asia market as well. After such a rally

0:01:33.560 --> 0:01:37.360
<v Speaker 3>that we have seen in South Korea, China, arguably in Japan,

0:01:37.760 --> 0:01:40.960
<v Speaker 3>I think that bar right now is getting higher as well. However,

0:01:41.200 --> 0:01:45.039
<v Speaker 3>I want to bring your attention to the valuation landscape.

0:01:45.120 --> 0:01:48.920
<v Speaker 3>Right even after the broader rally in Asia tech that

0:01:48.960 --> 0:01:52.480
<v Speaker 3>we have seen so far, it's still valued much lower

0:01:52.520 --> 0:01:55.560
<v Speaker 3>than the US tech and which makes it really a

0:01:55.680 --> 0:01:58.640
<v Speaker 3>value and a growth play in the long term. And

0:01:58.760 --> 0:02:01.680
<v Speaker 3>if we look at the EPs growth, it's not great,

0:02:01.720 --> 0:02:06.240
<v Speaker 3>but it's improving sectors sector for the sector quarters after quarter.

0:02:06.400 --> 0:02:09.720
<v Speaker 3>So I think the long term story for this sector

0:02:09.880 --> 0:02:12.240
<v Speaker 3>in Asia is still constructive.

0:02:15.280 --> 0:02:18.239
<v Speaker 1>One of all, not necessarily the direct the AI please,

0:02:18.320 --> 0:02:20.880
<v Speaker 1>but the indirect ones because we know that in order

0:02:20.919 --> 0:02:24.639
<v Speaker 1>to power artificial intelligence will need the energy for example.

0:02:26.800 --> 0:02:28.120
<v Speaker 1>That that's a great question.

0:02:28.320 --> 0:02:32.840
<v Speaker 3>I really love that because exactly the global AI industry

0:02:33.120 --> 0:02:36.320
<v Speaker 3>is maturing over the last couple of years, so it's

0:02:36.360 --> 0:02:39.520
<v Speaker 3>gone from you know, this idea generation phase who has

0:02:39.560 --> 0:02:44.120
<v Speaker 3>the best model really to an operational intelligence phase where

0:02:44.160 --> 0:02:50.840
<v Speaker 3>we need to see actual monetization an operational AI ecosystem.

0:02:50.960 --> 0:02:56.880
<v Speaker 3>And in that sense, the supplementary roles into the AI

0:02:57.400 --> 0:03:01.760
<v Speaker 3>rally right now are benefiting and also positioned to benefit

0:03:02.400 --> 0:03:05.520
<v Speaker 3>in the coming quarters as the margin expansion goes in.

0:03:06.320 --> 0:03:09.320
<v Speaker 3>To your point, energy play is one of the one

0:03:09.360 --> 0:03:13.200
<v Speaker 3>of the pockets of opportunities that's getting a lot more

0:03:13.320 --> 0:03:18.520
<v Speaker 3>attention compared to the previous quarters because AI after the

0:03:18.720 --> 0:03:24.320
<v Speaker 3>record amount of AI capex energy and electricity demand in specific,

0:03:24.440 --> 0:03:28.600
<v Speaker 3>it's rallying two decade high and it's positioned to go

0:03:28.800 --> 0:03:32.480
<v Speaker 3>ten x in by twenty thirty. So that demand gap

0:03:32.560 --> 0:03:37.960
<v Speaker 3>needs all sorts of energy play. So you know, one

0:03:38.040 --> 0:03:41.600
<v Speaker 3>of the more prominent play right now is the nuclear

0:03:41.880 --> 0:03:45.360
<v Speaker 3>It gives twenty four to seven clean non emission play

0:03:45.560 --> 0:03:48.760
<v Speaker 3>from that part and benefiting the uranium minus as well,

0:03:48.840 --> 0:03:52.080
<v Speaker 3>and to a certain extent, the renewable other renewable energy

0:03:52.120 --> 0:03:56.440
<v Speaker 3>sources companies have been growing very fast in the second

0:03:56.440 --> 0:03:59.240
<v Speaker 3>half of the year. Also look at the valuation side

0:03:59.280 --> 0:04:02.440
<v Speaker 3>as well, and pointing to that growth and value play,

0:04:02.720 --> 0:04:06.720
<v Speaker 3>they are very attractively valued comparing to the other pockets

0:04:06.720 --> 0:04:07.080
<v Speaker 3>of AI.

0:04:08.720 --> 0:04:11.400
<v Speaker 4>With that in mind, which market do you think will

0:04:11.520 --> 0:04:13.520
<v Speaker 4>lead the way for the rest of US year and

0:04:13.600 --> 0:04:17.120
<v Speaker 4>into the first quarter of next year. Is it still

0:04:17.160 --> 0:04:20.600
<v Speaker 4>going to be perhaps South Korea for the region, especially

0:04:20.600 --> 0:04:22.480
<v Speaker 4>given how we're seeing a resurgent dollar.

0:04:24.880 --> 0:04:28.680
<v Speaker 3>Yeah, okay. I think that question really goes into two parts.

0:04:28.800 --> 0:04:33.320
<v Speaker 3>I think in terms of markets that is positioned well

0:04:34.360 --> 0:04:37.039
<v Speaker 3>towards the end of the year to next year, Korea

0:04:37.440 --> 0:04:40.080
<v Speaker 3>is one of the more high conviction market because it's

0:04:40.080 --> 0:04:43.919
<v Speaker 3>got the cleanest growth play right now and also translating

0:04:43.960 --> 0:04:48.080
<v Speaker 3>into the latest earning season while it's still quite early days,

0:04:48.080 --> 0:04:51.480
<v Speaker 3>but we can still see that over half of the

0:04:51.520 --> 0:04:55.520
<v Speaker 3>companies are reporting surprising to the upside. Also, it's got

0:04:55.600 --> 0:04:58.799
<v Speaker 3>two cleanest play in terms of growth. One is AI.

0:04:59.400 --> 0:05:04.240
<v Speaker 3>It's strategic position in the high member chip specialist role

0:05:04.320 --> 0:05:07.000
<v Speaker 3>in in the global AI supply chain is giving it

0:05:07.120 --> 0:05:10.040
<v Speaker 3>a long term tailwind and long term contracts as well

0:05:10.560 --> 0:05:14.520
<v Speaker 3>with margin expansion possibilities. But also it has a very

0:05:14.640 --> 0:05:19.600
<v Speaker 3>unique role in the global defense sector and also that

0:05:19.680 --> 0:05:22.880
<v Speaker 3>has an AI play to it as well. So these

0:05:22.920 --> 0:05:28.839
<v Speaker 3>two catalysts, I guess is driving the career market to

0:05:28.920 --> 0:05:32.840
<v Speaker 3>a broader growth play. Outside of that, I think China,

0:05:32.960 --> 0:05:36.159
<v Speaker 3>even though right now the the rally has stoled a

0:05:36.160 --> 0:05:39.120
<v Speaker 3>little bit, and I think investors are waiting for a

0:05:39.240 --> 0:05:45.120
<v Speaker 3>more pronounced and substantial policy stimulus to to you know,

0:05:45.240 --> 0:05:49.000
<v Speaker 3>pick on that rally again. And but also AI sector

0:05:49.080 --> 0:05:53.360
<v Speaker 3>in that country can still defy gravity as the broader

0:05:53.920 --> 0:05:57.479
<v Speaker 3>I guess hardware makers rally and race to to to

0:05:57.560 --> 0:06:01.720
<v Speaker 3>fight for the role for China's the domestic Navidia.

0:06:02.040 --> 0:06:06.080
<v Speaker 2>That was ANAWU Cross Asset investment specialist at Vanek speaking

0:06:06.080 --> 0:06:09.839
<v Speaker 2>to Bloomberg TV host April Hong and shrry On here

0:06:09.880 --> 0:06:21.279
<v Speaker 2>on the Daybreak Asia podcast. Welcome back to the Daybreak

0:06:21.320 --> 0:06:25.360
<v Speaker 2>Asia Podcast. I'm Doug Chrisner. Economies across Asia are being

0:06:25.400 --> 0:06:29.720
<v Speaker 2>reshaped by a new reality or realities plural. We've got

0:06:29.800 --> 0:06:34.000
<v Speaker 2>higher US tariffs, softer Chinese demand, and the growing impact

0:06:34.000 --> 0:06:37.200
<v Speaker 2>of artificial intelligence. And in the midst of it all,

0:06:37.440 --> 0:06:41.440
<v Speaker 2>money moving faster and more securely across borders. Joining me

0:06:41.520 --> 0:06:44.200
<v Speaker 2>now for a closer look is Sandeep Mahultra. He is

0:06:44.279 --> 0:06:49.680
<v Speaker 2>Executive VP of Core Payments for the Asia Pacific at MasterCard. Sandeep,

0:06:49.680 --> 0:06:51.440
<v Speaker 2>thank you so much for making time to chat with

0:06:51.480 --> 0:06:54.520
<v Speaker 2>me lately. I think we can agree on this much.

0:06:54.560 --> 0:06:57.400
<v Speaker 2>There has been a tremendous amount of focus on the

0:06:57.480 --> 0:07:01.159
<v Speaker 2>use of artificial intelligence. Give me a sense right now

0:07:01.320 --> 0:07:06.279
<v Speaker 2>best you can on how MasterCard is using AI, especially

0:07:06.320 --> 0:07:07.400
<v Speaker 2>in the APEC region.

0:07:09.360 --> 0:07:11.600
<v Speaker 5>Yeah, well, first of all, thank you for having me on.

0:07:11.840 --> 0:07:14.640
<v Speaker 5>And you know AI is the is the tok of

0:07:14.680 --> 0:07:15.000
<v Speaker 5>the town.

0:07:15.160 --> 0:07:18.200
<v Speaker 6>So if you look at MasterCard, you know our big

0:07:18.240 --> 0:07:22.480
<v Speaker 6>focus used to be converting cash to digital and then

0:07:22.680 --> 0:07:25.360
<v Speaker 6>over the last you know, one year or so, we

0:07:25.400 --> 0:07:28.720
<v Speaker 6>are actually taking this to the next level, so taking

0:07:28.880 --> 0:07:34.000
<v Speaker 6>digital to intelligent and this is where AI plays a

0:07:34.000 --> 0:07:37.920
<v Speaker 6>big role, where we are looking at intelligent transactions just

0:07:37.960 --> 0:07:41.280
<v Speaker 6>not digital, and we are actually changing our network to

0:07:41.360 --> 0:07:44.760
<v Speaker 6>be ready for this connected commerce, which is our vision

0:07:44.800 --> 0:07:45.480
<v Speaker 6>for twenty.

0:07:45.280 --> 0:07:48.920
<v Speaker 5>Thirty driven by AI. So what is AI going to do?

0:07:48.960 --> 0:07:51.960
<v Speaker 6>We want to make sure that consumers, when they do

0:07:52.160 --> 0:07:55.040
<v Speaker 6>discovery of the products or search the products on an

0:07:55.040 --> 0:07:59.920
<v Speaker 6>AI agent, are able to even do a purchase or

0:08:00.160 --> 0:08:04.920
<v Speaker 6>that without leaving that agent. Sounds very simple, but behind

0:08:04.920 --> 0:08:06.240
<v Speaker 6>the scenes, it's very complex.

0:08:06.320 --> 0:08:06.480
<v Speaker 3>Right.

0:08:06.880 --> 0:08:11.080
<v Speaker 6>What happens if you ordered green pair of socks and

0:08:11.160 --> 0:08:15.240
<v Speaker 6>red rive, who takes care of that? What happens if

0:08:15.280 --> 0:08:19.160
<v Speaker 6>a fraudulent transaction happens? How do you take care of that.

0:08:19.840 --> 0:08:22.880
<v Speaker 6>So what we are trying to ensure is that we're

0:08:22.880 --> 0:08:26.120
<v Speaker 6>trying to create a very safe, secure, and a transparent

0:08:26.760 --> 0:08:31.000
<v Speaker 6>kind of an environment for these agents to perform the transaction.

0:08:31.600 --> 0:08:33.880
<v Speaker 2>I'm wondering now on the degree to which you are

0:08:33.920 --> 0:08:37.880
<v Speaker 2>collaborating with other software developers over or whether this is

0:08:38.000 --> 0:08:42.120
<v Speaker 2>primarily something that is proprietary to the extent that you

0:08:42.280 --> 0:08:46.120
<v Speaker 2>need to employ a number of software engineers to help

0:08:46.200 --> 0:08:50.760
<v Speaker 2>facilitate this goal. What's the balance between collaboration and kind

0:08:50.760 --> 0:08:52.600
<v Speaker 2>of going alone in house.

0:08:54.600 --> 0:08:56.760
<v Speaker 5>It's all collaborative, it's all partnership.

0:08:56.840 --> 0:09:01.080
<v Speaker 6>It's all based on standards because you cannot anything propriety

0:09:01.160 --> 0:09:04.040
<v Speaker 6>because it won't scale. And if it doesn't scale, it

0:09:04.080 --> 0:09:06.760
<v Speaker 6>doesn't matter. So what we're trying to do is we're

0:09:06.800 --> 0:09:09.840
<v Speaker 6>working with the fidos of the world, which is the

0:09:09.840 --> 0:09:13.640
<v Speaker 6>standard community. We're working with cloud Flare and I'll tell

0:09:13.640 --> 0:09:16.520
<v Speaker 6>you what that does. We're working with PayPal, We're working

0:09:16.559 --> 0:09:19.760
<v Speaker 6>with many other partners to make sure that the transaction

0:09:19.960 --> 0:09:21.520
<v Speaker 6>happens in a safe, secure fashion.

0:09:22.160 --> 0:09:22.360
<v Speaker 4>You know.

0:09:22.559 --> 0:09:24.920
<v Speaker 6>One example is you want to make sure that when

0:09:24.920 --> 0:09:28.160
<v Speaker 6>the merchant accept a transaction, that agent is a good agent.

0:09:28.480 --> 0:09:29.240
<v Speaker 5>How do you do that?

0:09:29.520 --> 0:09:32.720
<v Speaker 6>And that's where cloud Flare club comes into picture, which

0:09:32.760 --> 0:09:36.440
<v Speaker 6>basically will block unit agent which is not a good agent,

0:09:37.160 --> 0:09:39.400
<v Speaker 6>and that provides, you know, comfort to the merchant who's

0:09:39.440 --> 0:09:40.719
<v Speaker 6>accepting those transactions.

0:09:41.760 --> 0:09:43.559
<v Speaker 2>So in the last two week here in the States,

0:09:43.640 --> 0:09:46.760
<v Speaker 2>we heard from a number of those big hyper scalers

0:09:47.320 --> 0:09:50.560
<v Speaker 2>on their AI caps spend. And I'm curious about the

0:09:50.559 --> 0:09:53.560
<v Speaker 2>degree to which you feel, maybe not you personally, but

0:09:53.679 --> 0:09:59.120
<v Speaker 2>MasterCard as a company feels compelled to lay out vast

0:09:59.160 --> 0:10:02.440
<v Speaker 2>sums of money in the capex realm in order to

0:10:02.480 --> 0:10:06.079
<v Speaker 2>be ready for this kind of change that you're describing.

0:10:08.120 --> 0:10:10.679
<v Speaker 6>Look, I think the hyperskillers are doing what they are

0:10:10.720 --> 0:10:14.320
<v Speaker 6>best in in terms of creating models, in terms of

0:10:14.480 --> 0:10:19.400
<v Speaker 6>providing the computing data to make sure that that is done.

0:10:19.800 --> 0:10:22.199
<v Speaker 6>What we are doing is we are basically saying, if

0:10:22.240 --> 0:10:25.840
<v Speaker 6>you search using that data to find an item you like,

0:10:26.360 --> 0:10:29.520
<v Speaker 6>we will make sure that that transaction which is done

0:10:29.880 --> 0:10:33.320
<v Speaker 6>within that AI interface, whether it's an agent, whether it's

0:10:33.360 --> 0:10:36.880
<v Speaker 6>some other protocol which the consumer is using, or if

0:10:36.880 --> 0:10:39.360
<v Speaker 6>the merchant has made a change, we will make that

0:10:39.520 --> 0:10:45.360
<v Speaker 6>commerce become safe, secure and intelligent and give comfort to

0:10:45.360 --> 0:10:48.560
<v Speaker 6>the consumer without leaving that agent, you know, domain.

0:10:48.720 --> 0:10:51.640
<v Speaker 2>San Deepe I'm curious as to whether there are certain

0:10:51.760 --> 0:10:55.920
<v Speaker 2>areas of the digital payment space that you're particularly concerned about,

0:10:55.920 --> 0:11:00.000
<v Speaker 2>perhaps something that you have to almost counter program again

0:11:00.000 --> 0:11:02.760
<v Speaker 2>anst whether there is a level of risk for your

0:11:02.800 --> 0:11:05.640
<v Speaker 2>business or the businesses of your customers. What are the

0:11:05.679 --> 0:11:07.400
<v Speaker 2>areas most concerning to you?

0:11:07.800 --> 0:11:09.800
<v Speaker 6>It is it is a big concern that if you

0:11:09.840 --> 0:11:13.240
<v Speaker 6>look at just Asia loan Asia lost about close to

0:11:13.440 --> 0:11:17.200
<v Speaker 6>six and seventy billion dollars of money due to fraud

0:11:17.360 --> 0:11:21.640
<v Speaker 6>in thus last year. So sixty percent of the banks

0:11:21.640 --> 0:11:25.680
<v Speaker 6>are brightticing AI driven fraud prevention and identity verification. So

0:11:25.720 --> 0:11:28.200
<v Speaker 6>that's a big focus for us. How we're going to

0:11:28.280 --> 0:11:31.080
<v Speaker 6>do that is we want to make sure that the

0:11:31.120 --> 0:11:35.199
<v Speaker 6>card numbers which you have don't exist anymore. So, whether

0:11:35.240 --> 0:11:38.600
<v Speaker 6>you save a card on file at Macy's dot Com,

0:11:38.679 --> 0:11:41.120
<v Speaker 6>we're going to replace it with a token, whether you

0:11:41.240 --> 0:11:44.720
<v Speaker 6>basically have a Apple Pay transaction that replaced by a

0:11:44.760 --> 0:11:45.640
<v Speaker 6>token even today.

0:11:46.320 --> 0:11:47.480
<v Speaker 5>And then even the.

0:11:47.360 --> 0:11:50.040
<v Speaker 6>Cards which are on the physical card, the card numbers,

0:11:50.040 --> 0:11:52.440
<v Speaker 6>we're going to make them numberless as well. So the

0:11:52.480 --> 0:11:56.520
<v Speaker 6>big focus is make that tokenized. No more card numbers

0:11:56.640 --> 0:11:59.360
<v Speaker 6>anywhere on the planet, and that's our goal for twenty

0:11:59.440 --> 0:12:02.880
<v Speaker 6>thirty and we must verify the user. We will make

0:12:02.880 --> 0:12:06.319
<v Speaker 6>sure that you are who you are for every transaction.

0:12:06.800 --> 0:12:12.040
<v Speaker 6>So fraud is the risk. But this tokenization and authentication,

0:12:12.120 --> 0:12:15.320
<v Speaker 6>which is verifying every user for every transaction, that's the

0:12:15.360 --> 0:12:17.840
<v Speaker 6>next step which we are moving towards and made a

0:12:17.840 --> 0:12:18.880
<v Speaker 6>big progress around that.

0:12:19.520 --> 0:12:23.000
<v Speaker 2>So when you're in conversation with your colleagues at MasterCard,

0:12:23.120 --> 0:12:26.280
<v Speaker 2>talk to me a little bit about aspirationally what the

0:12:26.280 --> 0:12:30.280
<v Speaker 2>world in the future looks like when we introduce quantum

0:12:30.320 --> 0:12:32.120
<v Speaker 2>computing to the payment system.

0:12:33.920 --> 0:12:37.440
<v Speaker 6>Yeah, so first, what quantum brings to the table is

0:12:37.559 --> 0:12:40.200
<v Speaker 6>it brings huge amount of computing in a different fashion,

0:12:40.760 --> 0:12:44.200
<v Speaker 6>it actually gets into the realm of even you know,

0:12:44.320 --> 0:12:49.280
<v Speaker 6>challenging today's cryptography and encryption, which is where the trust

0:12:49.360 --> 0:12:52.440
<v Speaker 6>is based on. So what we are working on is

0:12:52.480 --> 0:12:56.480
<v Speaker 6>we even created a crypto resistant cryptogram, you know, which

0:12:56.520 --> 0:12:59.520
<v Speaker 6>means a quantum resistant cryptrogram, which means that even a

0:12:59.600 --> 0:13:04.560
<v Speaker 6>quantum computer cannot actually decrypt that cryptogram or when the

0:13:04.600 --> 0:13:08.120
<v Speaker 6>transaction happens, it actually is very safe in nature. So

0:13:08.160 --> 0:13:11.360
<v Speaker 6>as the technology advances, you have to also advance in

0:13:11.400 --> 0:13:15.880
<v Speaker 6>this fraud prevention area because trust is the essence. The

0:13:16.000 --> 0:13:18.240
<v Speaker 6>day you break the trust of the consumer, they will

0:13:18.280 --> 0:13:20.960
<v Speaker 6>never transact and then you know, we would have a

0:13:21.000 --> 0:13:23.200
<v Speaker 6>tough time, you know, convincing the consumer and to do

0:13:23.240 --> 0:13:24.160
<v Speaker 6>these transactions.

0:13:24.600 --> 0:13:26.440
<v Speaker 5>So quantum does make a difference.

0:13:26.440 --> 0:13:28.319
<v Speaker 6>But we're looking into ways on how do you make

0:13:28.360 --> 0:13:31.360
<v Speaker 6>sure that these technologies are safe and secure?

0:13:31.679 --> 0:13:34.839
<v Speaker 2>To what extent are you using AI to actually help

0:13:34.920 --> 0:13:38.160
<v Speaker 2>build these platforms, which is to say, maybe you're relying

0:13:38.240 --> 0:13:42.120
<v Speaker 2>on it somewhat as a partner or a copilot or

0:13:42.120 --> 0:13:46.599
<v Speaker 2>a collaborator when your programmers are setting about developing software programs.

0:13:48.040 --> 0:13:50.400
<v Speaker 6>So AI is not new for us, right, We've used

0:13:50.440 --> 0:13:53.720
<v Speaker 6>AI for more than a decade. One of our three

0:13:53.760 --> 0:13:56.800
<v Speaker 6>of our services, one in three of our services today

0:13:56.880 --> 0:14:01.400
<v Speaker 6>leverages AI for insights and protection. And then we have

0:14:01.480 --> 0:14:04.960
<v Speaker 6>secured about one hundred and sixty billion transactions annually. And

0:14:05.000 --> 0:14:07.720
<v Speaker 6>then we have prevented over twenty billions of fraud every

0:14:07.800 --> 0:14:10.760
<v Speaker 6>year using AI. Now what's next is the next is

0:14:10.800 --> 0:14:14.440
<v Speaker 6>around this agent pay agent commerce. How do you make

0:14:14.480 --> 0:14:16.840
<v Speaker 6>sure that agent is a good agent? How do you

0:14:16.880 --> 0:14:19.600
<v Speaker 6>make sure that the user is present or not present

0:14:19.640 --> 0:14:22.040
<v Speaker 6>when they do the AI transaction? Because you can have

0:14:22.080 --> 0:14:25.160
<v Speaker 6>an autonomous transaction where the AI agent wakes up and

0:14:25.200 --> 0:14:27.040
<v Speaker 6>buys a ticket for you when the ticket price is

0:14:27.080 --> 0:14:29.640
<v Speaker 6>less than three hundred dollars. And the third thing is

0:14:29.880 --> 0:14:33.280
<v Speaker 6>the merchant may not be technologically sophisticated or not. How

0:14:33.280 --> 0:14:38.040
<v Speaker 6>do you make sure that this technologically unsophisticated merchant is

0:14:38.120 --> 0:14:41.200
<v Speaker 6>also part of this AI era. So that's what we

0:14:41.240 --> 0:14:46.360
<v Speaker 6>are working on. Prevent fraud, verify the consumer, make sure

0:14:46.360 --> 0:14:49.600
<v Speaker 6>the agent is good and it actually goes down to

0:14:50.680 --> 0:14:53.880
<v Speaker 6>a consumer who may not be AI sophisticated or a

0:14:53.920 --> 0:14:56.920
<v Speaker 6>merchant who may not be technologically sophisticated. That's what we're

0:14:56.960 --> 0:14:59.880
<v Speaker 6>working on by making one network do a lot of

0:15:00.040 --> 0:15:03.479
<v Speaker 6>heavy lifting and making more intelligent and more interoperable.

0:15:04.000 --> 0:15:06.880
<v Speaker 2>Sandy, before I let you go, describe for me the

0:15:06.960 --> 0:15:12.360
<v Speaker 2>current market dynamics in the APEC and your understanding about

0:15:12.400 --> 0:15:16.800
<v Speaker 2>the growth outlook for consumers and businesses in the region.

0:15:17.360 --> 0:15:21.200
<v Speaker 2>Is there a degree of optimism here or given some

0:15:21.240 --> 0:15:23.240
<v Speaker 2>of the volatility that we have seen not only in

0:15:23.320 --> 0:15:27.200
<v Speaker 2>markets but economies as well, are you a little maybe cautious?

0:15:29.200 --> 0:15:34.880
<v Speaker 6>I believe that Asia is leading in payments. It's not

0:15:35.080 --> 0:15:39.720
<v Speaker 6>the adopter of payment technology, it's the originator of that.

0:15:40.160 --> 0:15:44.360
<v Speaker 6>I personally see that the payment innovation is traveling from

0:15:44.520 --> 0:15:47.640
<v Speaker 6>east to west, where the other innovation might be traveling

0:15:47.680 --> 0:15:50.760
<v Speaker 6>from west to east. So I'm very optimistic. Seventy percent

0:15:50.760 --> 0:15:54.480
<v Speaker 6>of the real time payment transactions happening in Asia, and

0:15:54.760 --> 0:15:58.600
<v Speaker 6>there are wallets in China, there Alipay, v chat pay,

0:15:58.680 --> 0:16:01.160
<v Speaker 6>you have g cash and Philippine means they are just

0:16:01.560 --> 0:16:06.200
<v Speaker 6>buzzing driving electronic and digital transactions. What we're doing is

0:16:06.520 --> 0:16:11.040
<v Speaker 6>we are trying to create interoperability with these other ecosystems,

0:16:11.440 --> 0:16:14.840
<v Speaker 6>so which means you could be a consumer from the

0:16:14.960 --> 0:16:18.120
<v Speaker 6>US traveling to China. You can download an Alipay app,

0:16:18.280 --> 0:16:20.680
<v Speaker 6>you can put your card in there, and you can

0:16:20.720 --> 0:16:24.480
<v Speaker 6>transact wherever Alipay is accepted with no changes to the merchant.

0:16:24.680 --> 0:16:27.200
<v Speaker 6>That's just brilliant. This is where you brought in a

0:16:27.200 --> 0:16:32.440
<v Speaker 6>card ecosystem and a quality ecosystem talk to each other. That's,

0:16:32.480 --> 0:16:35.520
<v Speaker 6>in simple words, in properability. And wouldn't be cool that

0:16:35.600 --> 0:16:38.640
<v Speaker 6>somebody from Philippines using a g cash app goes to

0:16:38.680 --> 0:16:41.680
<v Speaker 6>the US, taps on a terminal and New York City

0:16:41.800 --> 0:16:44.920
<v Speaker 6>in New York City transit and that works with no changes.

0:16:45.200 --> 0:16:47.640
<v Speaker 6>I think that's introberability which we are seeing, and that's

0:16:47.680 --> 0:16:50.400
<v Speaker 6>where I'm very happy about you know, Asia is leading

0:16:50.400 --> 0:16:53.440
<v Speaker 6>the edge in this digital payments which is safe and secure.

0:16:53.840 --> 0:16:57.200
<v Speaker 2>So does it make sense to continue to cooperate with

0:16:57.360 --> 0:17:02.000
<v Speaker 2>these competing platforms or maybe at some point to become acquisitive.

0:17:02.640 --> 0:17:05.160
<v Speaker 6>Absolutely, I mean the whole idea is to partner because

0:17:05.280 --> 0:17:07.359
<v Speaker 6>we will never win the game alone. We have to

0:17:07.400 --> 0:17:10.719
<v Speaker 6>go together. So the wallets bring in the consumers. They

0:17:10.760 --> 0:17:13.680
<v Speaker 6>bring in an amazing consumer experience. We bring in acceptance,

0:17:13.680 --> 0:17:16.080
<v Speaker 6>which is one hundred and fifty plus million locations around

0:17:16.119 --> 0:17:18.199
<v Speaker 6>the world. We'll bring in trust, we bring in you know,

0:17:18.240 --> 0:17:21.040
<v Speaker 6>dispute resolution and things go wrong. So the whole idea

0:17:21.080 --> 0:17:24.760
<v Speaker 6>is to partner and basically leverage the strengths of what

0:17:24.880 --> 0:17:27.760
<v Speaker 6>each of these entities bring together. And that's how we

0:17:27.800 --> 0:17:29.639
<v Speaker 6>have grown over the last sixty years plus.

0:17:30.119 --> 0:17:33.520
<v Speaker 2>So you wouldn't buy a platform outright, I.

0:17:33.520 --> 0:17:36.120
<v Speaker 6>Mean built by partners. Our strategy so where it makes

0:17:36.160 --> 0:17:38.919
<v Speaker 6>sense we would build, whether we buy or whether we partner.

0:17:39.640 --> 0:17:42.880
<v Speaker 6>Partnership seems to be one of the best strategies so far,

0:17:43.880 --> 0:17:46.880
<v Speaker 6>so that's what we focus on. But when it makes sense,

0:17:46.960 --> 0:17:50.000
<v Speaker 6>we have bought companies, We've bought Recorded Future, you know,

0:17:50.040 --> 0:17:54.560
<v Speaker 6>which tracks fraud around the globe. We've done a corporative

0:17:54.600 --> 0:17:56.240
<v Speaker 6>exercise with Corpe which.

0:17:56.080 --> 0:17:58.160
<v Speaker 5>Actually drives forth business to business payments.

0:17:58.480 --> 0:18:00.960
<v Speaker 6>So we look at well where it makes sense to

0:18:00.960 --> 0:18:03.040
<v Speaker 6>build by a partner and be adop that strategy.

0:18:03.320 --> 0:18:05.320
<v Speaker 2>Sandai believe it there. Thank you so much for making

0:18:05.359 --> 0:18:08.320
<v Speaker 2>time to chat with me. Sandeep Maholtra. He is Executive

0:18:08.359 --> 0:18:12.240
<v Speaker 2>VP of Core Payments for the Apac Region at MasterCard.

0:18:15.320 --> 0:18:18.680
<v Speaker 2>Thanks for listening to today's episode of the Bloomberg Daybreak

0:18:18.840 --> 0:18:22.200
<v Speaker 2>Asia Edition podcast. Each weekday, we look at the story

0:18:22.280 --> 0:18:26.639
<v Speaker 2>shaping markets, finance, and geopolitics in the Asia Pacific. You

0:18:26.640 --> 0:18:30.760
<v Speaker 2>can find us on Apple, Spotify, the Bloomberg Podcast YouTube channel,

0:18:30.880 --> 0:18:33.879
<v Speaker 2>or anywhere else you listen. Join us again tomorrow for

0:18:34.040 --> 0:18:37.520
<v Speaker 2>insight on the market moves from Hong Kong to Singapore

0:18:37.920 --> 0:18:41.680
<v Speaker 2>and Australia. I'm Doug Chrisner, and this is Bloomberg