WEBVTT - FIS's Stephanie Ferris Talks Earnings, AI Risk

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Thanks Sure.

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<v Speaker 3>A report from a little known firm called Tatrini Research

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<v Speaker 3>sent shockwaves across multiple sectors this week, outlining scenarios in

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<v Speaker 3>which AI agents remove all friction in the economy. Among

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<v Speaker 3>the scenarios, AI agents seek to save users by eliminating

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<v Speaker 3>transaction fees charged by payment processing firms like MasterCard and Visa.

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<v Speaker 3>Let's get insight on how one executive is navigating potential

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<v Speaker 3>risks from AI. Sephanie Feris joins us at the desk.

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<v Speaker 3>She CEO of Fis, a fintech that helps banks, merchants,

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<v Speaker 3>and capital market firms process payments globally. Stephanie, so great

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<v Speaker 3>to have you for It's been a very fun week

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<v Speaker 3>for you two with everything.

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<v Speaker 2>That's going on.

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<v Speaker 3>And look, of course your revenues don't come from interchange

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<v Speaker 3>fees directly, but of course a lot.

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<v Speaker 2>Of your customers grapple with this.

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<v Speaker 3>How were you thinking about the likelihood that this could

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<v Speaker 3>be the future that the payments world and processing were

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<v Speaker 3>and interchange fees completely gets disrupted by AI.

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<v Speaker 1>Well, it's a great question and it's certainly to hot

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<v Speaker 1>topic of the day. Pulling way out I think if

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<v Speaker 1>we think about FIS, we're the largest financial technology firm

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<v Speaker 1>that serves financial services broadly, we see more money that

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<v Speaker 1>goes across our entire money life cycle. We support like

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<v Speaker 1>twelve percent of the world's economy uses our technology, so

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<v Speaker 1>we have a great purview in terms of what's happening.

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<v Speaker 1>I think the other thing to note that's important as

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<v Speaker 1>we tackle this question is why we're so excited about

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<v Speaker 1>twenty twenty six and beyond and so optimistic And I'll

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<v Speaker 1>bring it back to AI. But financial services in itself

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<v Speaker 1>is growth on. We are really seeing a generational moment here.

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<v Speaker 1>So you think about the banking industry and where it

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<v Speaker 1>sits today in terms of its ability to have less

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<v Speaker 1>regulatory be able to grow organically or inorganically fifty billion

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<v Speaker 1>dollars worth of M and A transactions last year, be

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<v Speaker 1>able to innovate inside the financial services industry with crypto

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<v Speaker 1>and tokenized deposits. So financial services as a set, which

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<v Speaker 1>payments is part of that has a real growth on agenda.

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<v Speaker 1>At the same time, there's a tectonic shift happening in technology,

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<v Speaker 1>which is AI. So you put those two things together

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<v Speaker 1>and for me, it's a generational moment. So when I

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<v Speaker 1>think about financial services including payments, you put those two

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<v Speaker 1>trends together and it's pretty exciting, especially for FIS because

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<v Speaker 1>we serve that industry now with respect to AI, which

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<v Speaker 1>seems to be the topic of the day, and I

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<v Speaker 1>certainly also read the report. Look, I think what you're

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<v Speaker 1>going to hear from many CEOs that we are eternal optimists,

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<v Speaker 1>so we believe in technology, and as CEO of a

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<v Speaker 1>technology company, we think innovations and technology like this are

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<v Speaker 1>really good. We also have survived them over many, many decades,

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<v Speaker 1>and so when you think about it from an FIS standpoint,

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<v Speaker 1>we process transactions and run technology for systems of record.

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<v Speaker 1>They're multi decade system and they're AI enablers. So we

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<v Speaker 1>don't see a world where we're disrupted by AI. We

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<v Speaker 1>actually see a world where AI is a strategic accelerant.

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<v Speaker 1>And I think that's what you're going to hear from

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<v Speaker 1>a lot of us that run technology across the financial

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<v Speaker 1>services industry. What you need to have AI capabilities is

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<v Speaker 1>a fantastic data and data mote and data strategy, and

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<v Speaker 1>that's what we have. We have more data at FIS

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<v Speaker 1>than anyone in the financial services industry. We have over

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<v Speaker 1>a billion cardholder accounts on file, we process seventy three

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<v Speaker 1>billion transactions. We see over nine hundred million bank accounts

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<v Speaker 1>on file, and so when we are talking to our

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<v Speaker 1>customers about AI, it's about how do we help them

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<v Speaker 1>use their data?

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<v Speaker 2>How do we help them get to their data?

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<v Speaker 1>How do we help them build AI agents on top

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<v Speaker 1>of that data. So for us, we see it as

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<v Speaker 1>an accelerant.

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<v Speaker 2>I was thinking about it.

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<v Speaker 4>I was thinking about this when I read this a

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<v Speaker 4>trainee piece. He obviously brings up crypto with his reference

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<v Speaker 4>to Ether and Solana as maybe payment rail with less friction.

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<v Speaker 4>And you've seen this before right in your career. You

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<v Speaker 4>were at Fifth Third dealing with payment processing, then at

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<v Speaker 4>PwC before. So AI is just another I mean maybe

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<v Speaker 4>it's generational, right, but you've seen generational shifts with bitcoin

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<v Speaker 4>in two thousand and nine and with the Internet in

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<v Speaker 4>the late nineties. So do you adopt those technologies and

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<v Speaker 4>then use them to do a better job serving your

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<v Speaker 4>clients or do you worry that they will put you

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<v Speaker 4>out of business?

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<v Speaker 1>Yeah, well, we know absolutely have to adopt them right

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<v Speaker 1>our job in terms of payment capabilities, and you're exactly right.

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<v Speaker 1>Whether it's a check, acch WY or real time payments,

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<v Speaker 1>crypto tookenized deposits. Our job as the technology provider is

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<v Speaker 1>to make those capabilities available to everyone on our financial institutions.

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<v Speaker 1>So we have to make sure that we innovate so

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<v Speaker 1>that they can provide those capabilities. If their clients wants

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<v Speaker 1>to use Crypto, they need to be able to use Crypto,

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<v Speaker 1>If they want to use Circle, if they want to

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<v Speaker 1>use a tokenized.

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<v Speaker 2>Deposit, you have to have that capability.

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<v Speaker 1>The great news is we have all and the good

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<v Speaker 1>news is we're not seeing any of the other things

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<v Speaker 1>go away. It's an and to your point, right, it hasn't.

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<v Speaker 1>We haven't seen ACH go away. We haven't seen branches

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<v Speaker 1>go away. We haven't seen ATMs go away. It's an and,

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<v Speaker 1>so for us, it's an and. Now when you think

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<v Speaker 1>about a technology company ourselves, the thing that I'm most

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<v Speaker 1>focused on as a CEO is making sure that I

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<v Speaker 1>enable my entire fifty five thousand people to be not

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<v Speaker 1>only AI literate, but AI strength and strong. So we're

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<v Speaker 1>investing four times in AI capabilities, both in terms of

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<v Speaker 1>MATT like you talked about, to deliver to our our

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<v Speaker 1>customers the products, but also to make sure that our

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<v Speaker 1>technologists are the best in the industry in terms of

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<v Speaker 1>how to use this technology.

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<v Speaker 2>It's like putting a computer on your desk.

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<v Speaker 1>I talk to them all the time about well most

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<v Speaker 1>of them don't even remember, but remember when you had

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<v Speaker 1>a desk and you did paperwork, and then the next

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<v Speaker 1>day you had a desk and you had a computer.

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<v Speaker 1>No one taught you how to use it. You powered

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<v Speaker 1>it on and figured it out. And so that's how

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<v Speaker 1>we're thinking about it. We're making a lot of investment

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<v Speaker 1>in our colleagues to make sure that we keep them

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<v Speaker 1>upskilled and that they can actually be cutting front end

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<v Speaker 1>As a technology how.

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<v Speaker 3>Are you thinking about that growth of your talent, Because

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<v Speaker 3>there's one theory you added more AI, less people, and

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<v Speaker 3>the other one, which maybe is more interesting. If AI

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<v Speaker 3>can do more and can produce more code, you need

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<v Speaker 3>more people to oversee that code.

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<v Speaker 2>How are you thinking.

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<v Speaker 3>About things like headcount as you add technology to what

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<v Speaker 3>people are already doing at FIS.

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<v Speaker 2>Yeah, it's a great question. We get it all the time.

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<v Speaker 1>For me, it's most important as a technology company CEO.

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<v Speaker 1>I need everyone in my company to be using the

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<v Speaker 1>most cutting edge technology, whether we're using it to deliver

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<v Speaker 1>for our products or we're using it internally for ourselves.

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<v Speaker 1>I put it in every single person's hands. Everybody has

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<v Speaker 1>digital capabilities and digital agent capabilities. Now the challenge it

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<v Speaker 1>and then we give a lot of learning, but you

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<v Speaker 1>have to have.

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<v Speaker 2>A natural curiosity to want to do it.

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<v Speaker 1>I talk a lot about my dad who lost his

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<v Speaker 1>job in the nineties and didn't have a didn't know

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<v Speaker 1>how to.

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<v Speaker 2>Work on a computer.

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<v Speaker 1>I came into my care in the nineties and I

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<v Speaker 1>had a computer. I never knew how to not work

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<v Speaker 1>with a computer. He never knew how to work with

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<v Speaker 1>a computer. So that's really where we are in terms

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<v Speaker 1>of AI. You have to need, you have to want

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<v Speaker 1>to learn how to do it. And it's my job

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<v Speaker 1>as a CEO to make sure that I put the

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<v Speaker 1>tools in your hands and I encourage you to do it,

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<v Speaker 1>and then it's really up to you to make sure

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<v Speaker 1>that you embrace it.

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<v Speaker 4>One of the things you need at FIS is obviously

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<v Speaker 4>for consumers to keep powering this economy for sure, right

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<v Speaker 4>and you know, never count the American consumer out is

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<v Speaker 4>something that I've been hearing for twenty five years but

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<v Speaker 4>the alarm, part of the alarm that the treaty piece

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<v Speaker 4>raised is that the white collar jobs are the ones

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<v Speaker 4>that are going to be lost now they're the ones

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<v Speaker 4>that power the bulk of the spending. How much do

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<v Speaker 4>you worry about that? You've got to think about it.

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<v Speaker 4>It's so big picture and it's so kind of nebulous,

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<v Speaker 4>but it would be a concern, right if if the

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<v Speaker 4>top ten percent were reduced in terms of workforce.

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<v Speaker 1>Yes, and no. So you're absolutely right. So first of all,

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<v Speaker 1>I agree with you. I never count count the US

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<v Speaker 1>consumer out, and in fact, because of the large data

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<v Speaker 1>that we see, not only are financial services and banks

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<v Speaker 1>booming globally, but the consumer continues to remain healthy. I

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<v Speaker 1>think you just talked about that on your previous piece.

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<v Speaker 1>We're not seeing signs that a consumer is under stress

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<v Speaker 1>or duress. So that's good, and I do think I

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<v Speaker 1>agree that you sell me that.

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<v Speaker 4>Bears repeating because you have a great viewpoint to judge this.

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<v Speaker 4>You're not seeing signs that the consumer is under stress.

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<v Speaker 2>No, we're not.

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<v Speaker 1>The consumer remains healthy, banks remain healthy, financial services remains healthy,

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<v Speaker 1>and is growth on. I think that's really and that

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<v Speaker 1>is true globally. I think that's really important to reinforce

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<v Speaker 1>and it's also why we as fis serving that that sector,

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<v Speaker 1>feel so good about what's going to happen for our company.

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<v Speaker 1>But also I think it's important to know we aren't

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<v Speaker 1>seeing any signs of that yet. So in terms of

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<v Speaker 1>then how to think about the you know, worker like

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<v Speaker 1>frankly like myself that are older and need to adopt

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<v Speaker 1>new technologies're not older. Oh, thank you, thank you so much. Look,

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<v Speaker 1>I think it's this is my point where I tell

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<v Speaker 1>the story about my dad, and I talk by the

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<v Speaker 1>way everybody tell everybody.

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<v Speaker 2>It's a great ending. He retired.

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<v Speaker 1>He couldn't figure out how to do save or save

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<v Speaker 1>as on the computer, but my mom could and he

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<v Speaker 1>was very happy.

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<v Speaker 2>So it's a happy story.

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<v Speaker 1>But I do think it's a incumbent, and I talk

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<v Speaker 1>to my teams about it a lot. I'm not worried

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<v Speaker 1>about the younger workers. My daughter's about to graduate and

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<v Speaker 1>come into the workforce.

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<v Speaker 2>She needs to get a job.

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<v Speaker 1>She will know how to use AI, just like I

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<v Speaker 1>figured out how to use a computer. It's really incommon

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<v Speaker 1>upon me, as the CEO of the technology company to

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<v Speaker 1>put that in everybody's hands.

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<v Speaker 2>Do I worry about it? I yes and no.

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<v Speaker 1>But we need to make sure that we're giving everybody

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<v Speaker 1>an equal opportunity to get after it. The Citron research story,

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<v Speaker 1>as I told you about it before we came on,

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<v Speaker 1>it was super depressing. And then I woke up the

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<v Speaker 1>next morning and I was, you know, again going back

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<v Speaker 1>to my optimistic point as a CEO markets two. Yeah,

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<v Speaker 1>it's too much to take, and so I think we're all.

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<v Speaker 2>Going to be just fine. Stephanie. This has been so amazing.

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<v Speaker 2>We could have you on for another hour.

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<v Speaker 3>I also think, by the way, part of this conversation

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<v Speaker 3>is why it's important that like schools are teaching AI

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<v Speaker 3>and they're not resisting against it.

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<v Speaker 2>Stephanie, please please come back again. This is so wonderful.

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<v Speaker 4>Are you actually from the great state of Ohio?

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<v Speaker 2>I am all right. That's that's why.

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<v Speaker 4>Oh wow, we're God.

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<v Speaker 2>You and I have a connection there, don't we.

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<v Speaker 4>In that I used to go to parties at Miami.

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<v Speaker 2>Exactly, and miamis oh I have basketball. I have to

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<v Speaker 2>mention out. Great job, go red HAWX. I love this, Stephanie,

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<v Speaker 2>Thank you so much. Again. That's Stephanie Ferris. The CEO

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<v Speaker 2>of FIS,