Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: This is Bloomberg BusinessWeek with Carol Messer and Tim Stenebeck
Speaker 2: on Bloomberg Radio.
Speaker 3: Today, President Joe Biden is hiking tariffs on a wide
Speaker 3: range of Chinese imports, including semiconductors, batteries, solar cells, and
Speaker 3: critical minerals, in an election year bid to bolster domestic
Speaker 3: manufacturing and critical industries. The moves represent Biden's most comprehensive
Speaker 3: update to the China tariffs first imposed by his predecessor,
Speaker 3: former President Donald Trump, and a recognition that a hawkish
Speaker 3: approach to trade with Beijing remains popular with US voters. Still,
Speaker 3: Biden must strike a careful balance. Additional tariffs risk increasing
Speaker 3: prices for consumers already HEARDing from inflation and inspiring the
Speaker 3: ire of China, which could choose to retaliate in Kime.
Speaker 3: And then there's Taiwan. Today, the US and Taiwan navies
Speaker 3: conducted joint drills in the Western Pacific in April. This
Speaker 3: was coming from Reuters reporting that out citing for unidentified
Speaker 3: people briefed on the matter. This is China's military has
Speaker 3: ramped up its activities in and around Taiwan over the
Speaker 3: past few years. As we like to say, I say
Speaker 3: it a lot. It's complicated, and that's what a new
Speaker 3: book gets into. Joining us is Siman Khan. He's professor
Speaker 3: and Dennison Chair in History and International Relations at Tuff's University.
Speaker 3: He's a historian his new book, The Struggle for Taiwan,
Speaker 3: A History of America, China and the Island Caught Between.
Speaker 3: He joins us right now from Boston. Silman, so great
Speaker 3: to have you here with us. When we talk about
Speaker 3: geopolitical concerns right now. Yes we talk about Russia and Ukraine.
Speaker 3: Yes we talk about the Middle East, but we also
Speaker 3: talk about the complicated, increasingly complicated relationship the US has
Speaker 3: with China, and a big reason is Taiwan. First of all,
Speaker 3: when you sat down to write this book, what was
Speaker 3: top of mind for you? Was it to give us
Speaker 3: all a history? Lesson?
Speaker 2: What was it?
Speaker 4: Thank you for having me, Carol. There was a lot
Speaker 4: on my mind. I simply wanted people to understand how
Speaker 4: we got to this point. I wanted a legislator or
Speaker 4: an official flying to Taiwan to be able to read
Speaker 4: the book on the plane and say, Okay, I know
Speaker 4: what's behind all this. Because we're now at a point
Speaker 4: where there are large numbers of ships floating too close
Speaker 4: to one another, too many planes in the sky, and
Speaker 4: the US and China seemed to my mind to be
Speaker 4: one accident and a bad decision away from something that
Speaker 4: could go horribly, horribly wrong for all of us. And
Speaker 4: going through the history shows you both how we got here,
Speaker 4: but also that there were various ways out along the way,
Speaker 4: and there are moments that we can look to and
Speaker 4: learn from and that might help us better navigate the future.
Speaker 3: Well, it's interesting that you say that, and I do
Speaker 3: wonder it always feels so delicate, if you will, And
Speaker 3: I think about going back to when Nancy Pelosi what
Speaker 3: was it the summer of twenty twenty two, and took
Speaker 3: a visit she was then what US House speaker, and
Speaker 3: she went to visit Taipei. That was not a great situation,
Speaker 3: to say the least.
Speaker 4: It was not a great situation. And if you cast
Speaker 4: your mind back to that, you might remember who she Jin,
Speaker 4: who was the editor of a tabloid, saying her plane
Speaker 4: should be shot down, which was remarkable. It's not something
Speaker 4: that you would expect to be said, because usually Beijing
Speaker 4: has been quite good at controlling the level of vitriol
Speaker 4: that gets into propaganda. But you think about it, and
Speaker 4: then you cast your mind back to the Heinan spyplane
Speaker 4: incident that kicked off George W. Bush's presidency, and you say,
Speaker 4: you know, a Chinese plane collided with an American plane.
Speaker 4: But we all managed to walk away from that alive.
Speaker 4: That was partly because there was an interest in both
Speaker 4: Beijing and in Washington and getting along and in not
Speaker 4: going to roar. When Pelosi went to Taiwan, the thought
Speaker 4: that kept going through my mind was if this goes wrong,
Speaker 4: do we have that mutual commitment to getting out of it?
Speaker 4: A life is still intact. And the answer seemed to
Speaker 4: be uncertain, which is not something you want to think
Speaker 4: about when there are two great powers armed with nuclear weapons.
Speaker 3: You know, it's interesting. I feel like we have that
Speaker 3: conversation a lot about, you know, both of us, kind
Speaker 3: of whether it was the Middle East with Iran and Israel,
Speaker 3: about walking away and saying, wait a minute, the risks
Speaker 3: of moving forward are escalating. Are just it's too much
Speaker 3: that's at stake. But when you look at what's happening
Speaker 3: in Taiwan and the US and China. Is that willingness
Speaker 3: to walk away and preserve some calmness if you will?
Speaker 3: Is that willingness kind of waning if you will.
Speaker 4: I think it's waxing and waning, to be honest, it
Speaker 4: depends in any given moment. It was heartening to see
Speaker 4: some commitments with both Joe Biden and she Thing reaching
Speaker 4: out to one another and saying, can we walk away
Speaker 4: from this? It was heartening to an extent to see
Speaker 4: some recognition that while China might be a competitor, we
Speaker 4: don't want to go all the way into cataclysm in
Speaker 4: some contact with Chinese officials to that effect. What was
Speaker 4: not heartening, however, was the fact that the waxing happened too.
Speaker 4: So you mentioned the terroriffs just now, you mentioned the
Speaker 4: possibility of you mentioned the drills, And it's an election year,
Speaker 4: and in an election year, everybody advis to get tough
Speaker 4: on China. One of the things Donald Trump did was
Speaker 4: to forge a bipartisan consensus around the idea that we
Speaker 4: needed to get.
Speaker 5: Tough on China.
Speaker 4: And that's something that in an election year will lead
Speaker 4: to what to my mind amounts to a lot of
Speaker 4: fosturing and a lot of dangerous bosturing, because the sensitivities
Speaker 4: in Beaging are such that you don't know when things
Speaker 4: will go wrong.
Speaker 3: Well well as you know, getting tough, the United States
Speaker 3: getting tough on China right, maybe through tariffs, and then
Speaker 3: there's something different. I feel like when it comes to Taiwan.
Speaker 3: Is that fair to say that that is a whole
Speaker 3: other level in terms of what China, how it's use
Speaker 3: Taiwan and the importance of it.
Speaker 4: I think it's certainly a whole other level to Beijing.
Speaker 4: I think Taiwan is one of those spots that hurts
Speaker 4: and that they felt they had a commitment from the
Speaker 4: United States to a one China principle that the United
Speaker 4: States still says we do not challenge that. But if
Speaker 4: you look at things like trying to bolster Taiwan's diplomatic partnerships,
Speaker 4: if you look at things like Belosi's visit to Taiwan
Speaker 4: and other senior lawmakers visits to Taiwan, you really do
Speaker 4: have to wonder, especially if you're sitting in Beijing, how
Speaker 4: committed is the United States to that principle that's being
Speaker 4: you know, in some ways at the core of the
Speaker 4: relationship between the two countries since Nixon and Kissinger went
Speaker 4: to China. If that is being challenged, it opens up
Speaker 4: a can of worms that's just far more sensitive than
Speaker 4: even a trade dispute would be. And that's one of
Speaker 4: the reasons this is so dangerous because I don't think
Speaker 4: even now there's sufficient understanding within the United States about
Speaker 4: just what Taiwan means to China. That's not to say
Speaker 4: that Taiwan shouldn't enjoy the fruits of a democracy. It's
Speaker 4: worked very hard to get to. It just means that
Speaker 4: some caution and some prudence would be in order.
Speaker 6: Why did you know?
Speaker 3: It feels like with President g the one country two systems,
Speaker 3: you know, policy that seemed to work. It doesn't feel
Speaker 3: like it does anymore.
Speaker 4: So one country two systems is a fascinating concept, and
Speaker 4: Bunshapping was actually the person who came up with it, right,
Speaker 4: And when Dun comes up with it, it's interesting he
Speaker 4: actually wants.
Speaker 5: It to work like two systems.
Speaker 4: He's very explicit about saying, you know, when Hong Kong
Speaker 4: comes back under one country two systems, I don't want
Speaker 4: to tamper with the second system. It's the goose that
Speaker 4: lays the golden eggs. Why would I change something that's working,
Speaker 4: and that actually starts off a huge debate in Taiwan
Speaker 4: at the time. Maybe one country, two systems is the
Speaker 4: way to go. What changes under Chijinbang, of course, is
Speaker 4: that the second system bit gets left out. Hong Kong,
Speaker 4: if you look at it today, is not a place
Speaker 4: that it was even ten years ago, even twenty years ago,
Speaker 4: when you could commemorate the Tianeman Square massacre, when you
Speaker 4: could criticize the government in Beijing, when you can do
Speaker 4: all sorts of things that you know mainland China proper,
Speaker 4: you probably could not have got away with. That's not
Speaker 4: the case anymore. So what Chijin Bang has demonstrated is
Speaker 4: that one country, two systems is a nice concept, but
Speaker 4: it can change with the people charged.
Speaker 5: With implementing it.
Speaker 4: And if you're sitting in taipe Ai and you say, look,
Speaker 4: we worked really hard to get to a democracy where
Speaker 4: there have been peaceful transitions of power, one country, two
Speaker 4: systems doesn't look all that attractive anymore.
Speaker 3: I want to get back to Suman Khan, professor and
Speaker 3: share in history and international Relations at TUF's University. He's
Speaker 3: got a new book out, The Struggle for Taiwan a
Speaker 3: history of America, China and the island caught between. He's
Speaker 3: still with us from Boston, Soman. How do we get
Speaker 3: here where Taiwan is caught between the United States and China,
Speaker 3: and we know that it's a nation that Beijing covets,
Speaker 3: protects ownership. You see it very clearly, and yet as
Speaker 3: you note, it wasn't historically Chinese.
Speaker 4: Historically it starts off being its own weird level waste
Speaker 4: station between East Asia and Southeast Asia maritime terms, and
Speaker 4: then the Qing dynasty conquers China.
Speaker 5: Along with other parts of the world.
Speaker 4: And conquerors Taiwan. That dynasty then loses Taiwan to the
Speaker 4: Japanese Empire in the War of eighteen ninety four to five,
Speaker 4: and Taiwan is ceded to in perpetuity. Perpetuity lasts till
Speaker 4: the end of World War Two, and the United States
Speaker 4: at the Cairo Declaration says that Taiwan is going to
Speaker 4: be restored to the Republic of China. Problem with that
Speaker 4: declaration being there's many different China's at the time, including
Speaker 4: of course the Communists and the civil war that erupts
Speaker 4: between the Communists and the nationalists that would be, the
Speaker 4: nationalists would be.
Speaker 5: The Republic of China.
Speaker 4: Is one that the United States is not sure where
Speaker 4: it stands on.
Speaker 5: It wants to wash its hands of the nationalists.
Speaker 4: And when the nationalists are eventually beaten back to the
Speaker 4: island of Taiwan, the betting money is sooner or later,
Speaker 4: this too, is.
Speaker 5: Going to become part of the People's Republic of China.
Speaker 4: What the nationalists set up on Taiwan is a police
Speaker 4: state by the way, that has a whiff of settler
Speaker 4: colonialism to it, so there's not much sympathy for it.
Speaker 4: But when the Korean War breaks out, Truman sends the
Speaker 4: Seventh Fleet to the Taiwan Street and that begins the
Speaker 4: separation of the island from the government that is governing China.
Speaker 4: For much of the next few decades, the United States
Speaker 4: is going to be stopped trying to choose between two Chinas.
Speaker 4: And it's only when Henry Kissinger and Richard Nixon decide
Speaker 4: to make peace with the PRC in nineteen seventy one
Speaker 4: that the United States once again has a modus vende
Speaker 4: with Beijing. But that leaves the fate of Taiwan uncertain
Speaker 4: because for domestic reasons, the United States feels it cannot
Speaker 4: come to a definitive handing over as it were, of
Speaker 4: Taiwan to the PRC. But the One China principle acknowledges
Speaker 4: that Chinese on both sides of the Taiwan Strait maintained
Speaker 4: that there is but one China, that Taiwan is a
Speaker 4: part of China. That the United States does not dispute
Speaker 4: this formulation.
Speaker 5: That is more or less.
Speaker 4: The situation that attains still normalization of relations between the
Speaker 4: United States and the PRC with Jimmy Carter overseasation comes
Speaker 4: with the Taiwan Relations Act, which means that the President
Speaker 4: is supposed to think about the defense of Taiwan, that
Speaker 4: being in the interests of the United States, which of
Speaker 4: course has Beijing howling mad. But that is where we are,
Speaker 4: and as a result, Taiwan has maintained a separation from
Speaker 4: China to this day.
Speaker 3: Well, you know, it's interesting, so you give that that history,
Speaker 3: and I feel like it's been a tortured relationship a
Speaker 3: little bit on the part of US and US politicians
Speaker 3: about what the US role is right in terms of
Speaker 3: protecting Taiwan.
Speaker 4: It remains a tortured relationship, you know, if you look
Speaker 4: at the Taiwan Relations Act and ask how is this
Speaker 4: consistent with the one China principle? Right, and so it
Speaker 4: doesn't look all that consistent, But one can talk one's
Speaker 4: way into thinking of it that way. If the United
Speaker 4: States remains committed to the defense of Taiwan at some level,
Speaker 4: that is saying we have an interest in what is
Speaker 4: happening here and we're willing to tell China what to
Speaker 4: do about it. So to maintain that that is somehow
Speaker 4: consistent with the idea that Taiwan is part of China
Speaker 4: seems to me to be untenable. Why is the United
Speaker 4: States committed to this? I think there's a whole host
Speaker 4: of reasons. There is partly credibility. One wants to show
Speaker 4: China one can be tough. There is domestic political consideration.
Speaker 4: One doesn't want to appear weak on China before one's constituents.
Speaker 5: There is I.
Speaker 4: Think among some people now there is some consideration, and
Speaker 4: this is probably what should be the argument if one
Speaker 4: we're going to make an argument, this is.
Speaker 5: Why the United States should defend Taiwan.
Speaker 4: Taiwan did everything right despite the United States foisting a
Speaker 4: police state on it. It made the transition to democracy.
Speaker 4: You know, that's an example for us in some ways
Speaker 4: on how to hand power over peacefully and how to
Speaker 4: deal with disinformation and what has been created on that
Speaker 4: island something that excites some sympathy.
Speaker 3: Well, so you know what I was thinking is I'm
Speaker 3: listening to you and I'm thinking, and I've thought about
Speaker 3: this a lot when we talk about Taiwan, is that
Speaker 3: what does Taiwan want and what's its own kind of
Speaker 3: independent thought in all of this? And I think about
Speaker 3: it especially. We spend so much time, as you would imagine,
Speaker 3: talking about semiconductors, the importance of TSMC, how important it
Speaker 3: is to the world, the global world of semiconductors. But
Speaker 3: I do think about what does Taiwan want in all
Speaker 3: of this? What can it do independently if anything?
Speaker 4: So I think what Taiwan wants. And you actually saw
Speaker 4: a consensus on this in the elections earlier this year.
Speaker 4: There doesn't seem to be any rush to unify with China.
Speaker 4: The three parties that were contesting the election mainly we're
Speaker 4: all pretty much agreed on that there is a fact
Speaker 4: that wants to declare independence outright. What's weighing against that
Speaker 4: of course is if one declares independence outright, one is
Speaker 4: stuck with a situation where that might provoke China into
Speaker 4: destroying such independence de facto independence as exists at the moment,
Speaker 4: and there's no guarantee that the United States would do
Speaker 4: the right thing there. One never knows what the United
Speaker 4: States will do or not do at a given moment.
Speaker 4: So I think if you asked what is the one
Speaker 4: thing most people in Taiwan are agreed on, it would
Speaker 4: be we don't want to jeopardize what we have. How
Speaker 4: one goes about that as a separate thing. Does it
Speaker 4: come with a commitment to declaring independence? Maybe some point
Speaker 4: down the line, if one has prepared one's defenses to
Speaker 4: the point where they could withstand or at least cost
Speaker 4: China a lot if there were to be assault.
Speaker 5: And one of the.
Speaker 4: Things that has sharpened this conversation in Taiwan is what
Speaker 4: happened in Ukraine. It looked like the reason the United
Speaker 4: States was willing to commit money to Ukraine and or
Speaker 4: Ukraine was the fact that the Ukrainians, against quite a
Speaker 4: bit of the betting money, stood up for themselves. Would
Speaker 4: Taiwan be willing to do that? And one of the
Speaker 4: interesting things about studying the past and studying how wars
Speaker 4: break out in the past and what people do is
Speaker 4: you never know till the last moment. There's an element
Speaker 4: of choice that comes into it. But it is a
Speaker 4: conversation that's being had over there, and it's a conversation
Speaker 4: that's being had with increasing intensity.
Speaker 3: Just thirty seconds, and I need you to be quick
Speaker 3: if I can, if I may the driver's seat. Who's
Speaker 3: in the driver's seat in this triangular relationship US, China
Speaker 3: or Taiwan.
Speaker 4: Nobody everybody has the illusion they're in the driver's seat,
Speaker 4: but they're all jostling for the steering wheel.
Speaker 3: That can cause issues, as we know. I hope we
Speaker 3: can continue this conversation in the future because I do
Speaker 3: feel like this is an important issue. And you're absolutely
Speaker 3: right with what's going on in Russia Ukraine right now,
Speaker 3: very very topical and very very relevant. Congratulations on the book.
Speaker 3: Suman Khan, Professor and Dennison Chair in History and International
Speaker 3: Relationships relations excuse me at Tufts University. His new book
Speaker 3: that is out, The Struggle for Taiwan, A History of America,
Speaker 3: China and the Island Caught Between. And you can if
Speaker 3: you missed any of it, be sure to catch it
Speaker 3: on our podcast feed. You're listening and watching Bloomberg Business Week.
Speaker 3: I'm Carol Masser, and this is Bloomberg.
Speaker 2: This is Bloomberg Business Week inside from the reporters and
Speaker 2: editors who bring you America's most trusted business magazine plus
Speaker 2: global business, finance and tech news as it happens. Bloomberg
Speaker 2: Business Week with Carol Messer and Tim Stenebek on Bloomberg Radio.
Speaker 3: All right, everybody, this is Bloomberg Business Week. Carol Masser.
Speaker 3: Tim Stenevik is off today. He should be back tomorrow,
Speaker 3: I believe, cross my fingers miss him very much. We
Speaker 3: do want to get to some news out of the
Speaker 3: global fintech space today and Groups quarterly earnings falling nineteen
Speaker 3: percent as a Chinese fintech pioneer founded by Jack Ma,
Speaker 3: struggling to find new drivers of growth, falling regulatory clamp
Speaker 3: downs at home. We know the Chinese market very specific,
Speaker 3: so there's a lot going on. I will say more
Speaker 3: generally when it comes to growth. AI Digital Crypto all
Speaker 3: top of mine. When it comes to those in the
Speaker 3: fintech space and trying to think about how they fuel
Speaker 3: growth and ongoing innovation. Our next guest has some thoughts
Speaker 3: on all of it. Stephanie Chwo is partner at Portage Ventures,
Speaker 3: a global fintech platform. They've got over two billion in
Speaker 3: assets under management, and she is joining us from San
Speaker 3: Francisco with a beautiful backdrop. Steph, Hey, good to have
Speaker 3: you here with us.
Speaker 2: How are you?
Speaker 6: I'm great, Thanks for having me, Carl, Well, listen for
Speaker 6: the track.
Speaker 3: Well, We're excited to have you here because I do
Speaker 3: feel like I feel like there is go back a
Speaker 3: couple of years and all we talked about was fintech
Speaker 3: and fintech innovation, and I feel like it got a
Speaker 3: little millow, but we're back at it. First of all,
Speaker 3: for our audience, tell us a little bit more about
Speaker 3: your firm. Fill in kind of the holes and specifically
Speaker 3: what you guys are up to.
Speaker 6: Two and a half billion dollar fintech platform.
Speaker 1: We've got an early stage fund that focuses on Series
Speaker 1: A and Series B investing five to twenty five million
Speaker 1: dollar lead checks. We've got a late stage each fund
Speaker 1: as well, and all we do is fintech across payments, banking,
Speaker 1: wealth management, insurance. So we have been at this for
Speaker 1: about the last decades, so have seen the rise and
Speaker 1: fall over the last little while.
Speaker 3: All right, so where are we in the cyclone? What's interesting?
Speaker 3: What's kind of really innovation? What is just like, Okay,
Speaker 3: here's a tweak on something that's already out there, but
Speaker 3: we can do it a little bit a little better, and
Speaker 3: it's just kind of you know, kind of maybe general business,
Speaker 3: if you will.
Speaker 1: The numbers are actually pretty study. I was looking at
Speaker 1: them earlier today. We're nowhere near the all time highs.
Speaker 1: In twenty twenty one, we're one and every four dollars
Speaker 1: was going into fintech. We're now looking at about seven
Speaker 1: billion dollars of fintech investing in Q one of the
Speaker 1: about sixty billion dollars the venture dollars going into the market,
Speaker 1: so it's now more like one in every eight dollars.
Speaker 6: But it's been pretty study the last four quarters.
Speaker 1: We're now kind of close to where we were in
Speaker 1: twenty seven teen terms in terms of where the fintech
Speaker 1: market is. But I think overall we're still super bullish
Speaker 1: on the market. Financial services is still a twelve and
Speaker 1: a half trillion dollar industry of which we're still scratching
Speaker 1: the surface. Only two percent of the total dollars flowing
Speaker 1: into financial services actually is flowing through FinTechs today. I
Speaker 1: think we're still in the opening innings despite being at
Speaker 1: a kind of plateau in the market for now.
Speaker 3: Well it's interesting too, you know, And we were just
Speaker 3: talking with some very senior members over at Wells Fargo.
Speaker 3: I do feel like the financial establishment still is very
Speaker 3: involved in everything and anything in the financial world. Having
Speaker 3: said that, you guys have a pretty big portfolio, tell
Speaker 3: me a little bit about some of the companies and
Speaker 3: what's kind of interesting, what's new, what do you think
Speaker 3: is kind of a trend of the future when it
Speaker 3: comes to this space.
Speaker 1: So I think the thing that everybody's talking about right
Speaker 1: now is AI. I think that will be the biggest
Speaker 1: pops in the market in terms of valuation, in terms
Speaker 1: of what investors are looking at right now, is AI.
Speaker 6: Within financial services. I think the.
Speaker 1: First early use cases that we're seeing across our portfolio,
Speaker 1: and we have a number of portfolio companies that are
Speaker 1: spending time in this space, are efficiency use cases. So
Speaker 1: how you work with large corporates today, I think every
Speaker 1: board is thinking about the efficiency use case. On the
Speaker 1: cost side, customer service, how to think about coding, how
Speaker 1: to think about the below the line marketing dollars. I
Speaker 1: think all of that is very clearly improvements in underwriting,
Speaker 1: improvements and lending, and I think AI in the financial
Speaker 1: services arena will start there. I think we're spending a
Speaker 1: lot of time thinking about how the customer experiences could
Speaker 1: end up eventually becoming more powerful in this space. That's
Speaker 1: we're still very early there. I think we will see
Speaker 1: the advent of pretty interesting domain specific models, but again
Speaker 1: and agents that will help you actually execute on new experiences.
Speaker 1: All of that is still to come, but AI is
Speaker 1: clearly where most large corporates I think today in the
Speaker 1: fintech space are focused.
Speaker 6: I do think in terms of what's new. It's interesting. Yeah, sorry,
Speaker 6: do I.
Speaker 3: Go there because I feel like, you know, it helped
Speaker 3: me out here, Drill down if you will, and be
Speaker 3: more specific if you can, and just because I feel
Speaker 3: like you guys are seeing things come across your desk
Speaker 3: or in your inbox, if you will, in terms of
Speaker 3: how it really changes our world. Because I think I
Speaker 3: heard a lot of we're early on in the inning.
Speaker 3: I feel like it's a lot of back office I
Speaker 3: I heard what you said about efficiencies. I feel like
Speaker 3: it's a lot of mundane tasks that all of a
Speaker 3: sudden we don't have to deal with anymore because of AI.
Speaker 3: But how are you thinking about it? Go the innovative
Speaker 3: rout of how things really get disrupted here in the
Speaker 3: fintech space.
Speaker 1: I think, again, we're still in the early innings. I
Speaker 1: think let's talk a little bit about the future of commerce.
Speaker 1: I was just reading a report that more than fifty
Speaker 1: percent of payments in e commerce are now actually done
Speaker 1: via some kind of digital wallet, like a PayPal. I
Speaker 1: think over time, the way in which we buy and
Speaker 1: the way in which we search, which is a corollary
Speaker 1: of fintech, will be completely different. Imagine a world in
Speaker 1: which your recommendation engine and the way you buy and
Speaker 1: discover goes through doesn't actually go through a one or
Speaker 1: doesn't actually go through separate sites. It's all done in
Speaker 1: an auto automated and automatic way through one search engine
Speaker 1: that allows you to have access to everything in the market.
Speaker 1: I think that's one vision of what a future agent
Speaker 1: led e commerce experience could look like. I think fraud
Speaker 1: is another very clear area that's going to be impacted here.
Speaker 1: There's new fraud vectors that have popped up because of GENI,
Speaker 1: but also I think real time fraud rails, because now
Speaker 1: we've got a whole bunch of new real time rail
Speaker 1: use cases where you can send money via crypto in
Speaker 1: an instant and there's no recourse. You've got RTP networks
Speaker 1: and fednow networks. There's a whole new set of fraud
Speaker 1: vectors that have emerged from this. I think because of
Speaker 1: that real time nature, we're going to see new advances
Speaker 1: in fraud models that you will use both JENI in
Speaker 1: the workflow, but also traditional mL in the workflow as well.
Speaker 6: So these are two.
Speaker 1: Areas that we're spending time on that I think will
Speaker 1: be very impacted by AI going forward.
Speaker 3: Does great And forgive me if I missed this, but
Speaker 3: did you say also crypto having a role in all
Speaker 3: of this.
Speaker 1: I think crypto as it relates to, like the most
Speaker 1: obvious crypto use cases infintech today have been payments, where
Speaker 1: stable coin flows are really democratizing and making global payments
Speaker 1: a very different landscape. It gives access to the emerging
Speaker 1: markets to US dollar denominated real treasury treasury and yield
Speaker 1: which I think has not had which is not really
Speaker 1: which the developing markets have not really had access to date,
Speaker 1: and so that's an area that we're watching closely as well.
Speaker 1: Because there are and stable coins and real time transactions means,
Speaker 1: unlike our domestic payment rails, in crypto, there is no
Speaker 1: recourse if you don't have the right recipient, and therefore
Speaker 1: there's whole new sets of fraud and payments engines that
Speaker 1: need to be developed on the front end in order
Speaker 1: to protect users.
Speaker 3: Listen real quickly thirty seconds here. Because you do have
Speaker 3: a portfolio of companies. We just talked with the Wells
Speaker 3: Fargo team in investment banking and markets about private equity
Speaker 3: having a lot of companies that maybe are going to
Speaker 3: want to come to market, whether it's IPO, but I
Speaker 3: am curious, are you looking to do some exits on
Speaker 3: your companies this year? And again just got about twenty
Speaker 3: five thirty seconds.
Speaker 1: I think we're seeing a lot of interesting private equity exits,
Speaker 1: particularly take privates in the payment processing space. I think
Speaker 1: example these aren't in our portfolio, but Newvey. There was
Speaker 1: also an advent transaction called mypos that happened in the UK.
Speaker 1: I think we're going to continue to see sponsor led
Speaker 1: exits in this market, but I'm most interested in the
Speaker 1: new wave of potential consumer ipoxs that we're going to
Speaker 1: see over the next three years.
Speaker 3: All Right, well, really fun to check in with you.
Speaker 3: Look forward to doing it again in the future. Steph Chu.
Speaker 3: She's partner at portage Ventures global fintech platform. As we
Speaker 3: said that two billion in assets undermanaged man