1 00:00:05,969 --> 00:00:09,010 Speaker 1: Welcome to Kobe Time, a podcast series on Markets and 2 00:00:09,020 --> 00:00:12,210 Speaker 1: Economies from D BS Group Research. I'm Tamur, be chief economist. 3 00:00:12,220 --> 00:00:15,270 Speaker 1: Welcoming you to our 128th episode. 4 00:00:15,670 --> 00:00:19,610 Speaker 1: Today, we will talk about payment trends in Asia as 5 00:00:19,620 --> 00:00:22,809 Speaker 1: well as some broader trends around the world. And we 6 00:00:22,819 --> 00:00:27,290 Speaker 1: have a veritable source of data from the horse's mouth. 7 00:00:27,299 --> 00:00:30,659 Speaker 1: If you will. Mastercards. Chief economist David Man is with us. 8 00:00:30,799 --> 00:00:33,129 Speaker 1: David has been with Mastercard for a few years, but 9 00:00:33,139 --> 00:00:35,150 Speaker 1: I have known David for a long time as the 10 00:00:35,220 --> 00:00:38,180 Speaker 1: chief economist, both Asia, as well as global chief economist 11 00:00:38,189 --> 00:00:40,669 Speaker 1: for Standard Charter. I think you spent over 20 years there. 12 00:00:40,680 --> 00:00:41,799 Speaker 1: That's right. That's right 13 00:00:41,860 --> 00:00:42,330 Speaker 2: time. 14 00:00:42,493 --> 00:00:44,423 Speaker 1: But Mastercard also quite a few years now. 15 00:00:44,433 --> 00:00:46,714 Speaker 2: Yes, it's close to four years now at Mastercard too. 16 00:00:46,723 --> 00:00:48,633 Speaker 2: So yeah, it's been quite a ride. 17 00:00:48,644 --> 00:00:51,074 Speaker 1: David Manne. Welcome to copy time. Thanks for having me. 18 00:00:51,083 --> 00:00:53,714 Speaker 1: It's great to have you, David. Let's start with the 19 00:00:53,723 --> 00:00:57,433 Speaker 1: data that we're going to talk about today. How large 20 00:00:57,444 --> 00:00:59,234 Speaker 1: is the universe of Mastercard data? 21 00:00:59,513 --> 00:01:02,043 Speaker 2: Well, it's something where it really is one of those 22 00:01:02,054 --> 00:01:05,674 Speaker 2: truly global companies where if you think about payments in 23 00:01:05,683 --> 00:01:08,744 Speaker 2: particular it's very hard not to think of mastercard as 24 00:01:08,753 --> 00:01:09,234 Speaker 2: being a key 25 00:01:09,318 --> 00:01:11,458 Speaker 2: part of that. But I would stress that it's not 26 00:01:11,468 --> 00:01:14,138 Speaker 2: just to do with the card side in the same 27 00:01:14,148 --> 00:01:16,527 Speaker 2: way that say Apple doesn't sell Apple. It's just the 28 00:01:16,538 --> 00:01:20,267 Speaker 2: name of the actual company itself doesn't quite capture just 29 00:01:20,277 --> 00:01:22,788 Speaker 2: all the different areas that it's actually in. But just 30 00:01:22,797 --> 00:01:27,987 Speaker 2: for context, it has about 143 billion transactions. For example, 31 00:01:27,998 --> 00:01:31,557 Speaker 2: there's about $9 trillion of gross dollar value of that 32 00:01:31,568 --> 00:01:34,657 Speaker 2: actually is going through the system. And we also do 33 00:01:34,667 --> 00:01:36,047 Speaker 2: have 100 million 34 00:01:36,141 --> 00:01:38,762 Speaker 2: acceptance locations around the world. So it is a very 35 00:01:38,772 --> 00:01:44,842 Speaker 2: significant sized business with more than 3.4 billion cards outstanding worldwide. Now, 36 00:01:44,851 --> 00:01:47,452 Speaker 2: of course, it can vary country to country of just 37 00:01:47,461 --> 00:01:49,611 Speaker 2: how many cards are actually in use. I would say 38 00:01:49,622 --> 00:01:53,022 Speaker 2: in general advanced economies, you would see a much higher portion, 39 00:01:53,031 --> 00:01:55,882 Speaker 2: for example of card use and therefore it's much easier 40 00:01:55,891 --> 00:01:58,171 Speaker 2: to see it. But there are increasing numbers of different 41 00:01:58,181 --> 00:02:01,152 Speaker 2: rails and payment rails. The mastercard is involved in, I 42 00:02:01,162 --> 00:02:02,891 Speaker 2: would probably say even just beyond 43 00:02:03,125 --> 00:02:06,934 Speaker 2: just actually confirming a transaction and having that ability to 44 00:02:06,945 --> 00:02:10,026 Speaker 2: think of it. Like a tech company in the payments 45 00:02:10,035 --> 00:02:12,876 Speaker 2: space is probably the best way to really go about it. 46 00:02:12,886 --> 00:02:15,234 Speaker 2: So all the new things that you're seeing would say 47 00:02:15,246 --> 00:02:18,906 Speaker 2: digital wallets, use of tokenization, anything that helps to make 48 00:02:18,916 --> 00:02:23,386 Speaker 2: transactions secure online, all of these things mastercard has been 49 00:02:23,395 --> 00:02:25,585 Speaker 2: involved with for a very long time all the way 50 00:02:25,595 --> 00:02:28,386 Speaker 2: through to things like central bank, digital currency and even 51 00:02:28,395 --> 00:02:29,695 Speaker 2: Blockchain applications, 52 00:02:30,139 --> 00:02:33,320 Speaker 1: right? In terms of the different rails being used, I 53 00:02:33,330 --> 00:02:35,309 Speaker 1: was in China a couple of weeks ago and I 54 00:02:35,320 --> 00:02:39,860 Speaker 1: got to connect my Apple Alipay QR code to mastercard. 55 00:02:39,869 --> 00:02:41,978 Speaker 2: Oh, that's great. Well, that was actually one of the 56 00:02:41,990 --> 00:02:45,169 Speaker 2: most exciting times actually is in the last few months 57 00:02:45,179 --> 00:02:47,339 Speaker 2: and even just in the last week or two where 58 00:02:47,350 --> 00:02:51,380 Speaker 2: we actually have just launched the domestic switching as AJ 59 00:02:51,389 --> 00:02:54,948 Speaker 2: V in China and we're adding huge amounts more I 60 00:02:54,960 --> 00:02:58,538 Speaker 2: would expect of the acceptance locations because previous 61 00:02:58,727 --> 00:03:00,878 Speaker 2: you would have been say having a card issued in 62 00:03:00,888 --> 00:03:03,627 Speaker 2: China that was being able to be used internationally on 63 00:03:03,638 --> 00:03:06,077 Speaker 2: the Mastercard Rails. Now it would be one where that 64 00:03:06,087 --> 00:03:09,638 Speaker 2: same uh the Mastercard switch which is doing all of 65 00:03:09,647 --> 00:03:13,277 Speaker 2: the uh the, the I would say the approval and 66 00:03:13,287 --> 00:03:16,377 Speaker 2: the clearing and the settlement. Now all of that can 67 00:03:16,388 --> 00:03:18,197 Speaker 2: be done too. And that just means that we're able 68 00:03:18,207 --> 00:03:22,117 Speaker 2: to really understand even more about what's going on domestically 69 00:03:22,127 --> 00:03:23,498 Speaker 2: as well as internationally. A 70 00:03:23,526 --> 00:03:25,957 Speaker 1: little later, I want to talk a little more about 71 00:03:25,968 --> 00:03:27,197 Speaker 1: what took China so long 72 00:03:27,546 --> 00:03:29,345 Speaker 1: and now that they've done it what it means. But 73 00:03:29,356 --> 00:03:33,376 Speaker 1: before that David in mid June, you spoke at NRF 74 00:03:33,386 --> 00:03:35,475 Speaker 1: 2024 National Retailers 75 00:03:35,485 --> 00:03:38,216 Speaker 2: Federation. Ok. Yes, that's right. So it was, it was 76 00:03:38,225 --> 00:03:42,255 Speaker 2: very exciting in that the folks from the, from the 77 00:03:42,266 --> 00:03:44,925 Speaker 2: NRF that were organizing, the event were saying they were 78 00:03:44,936 --> 00:03:48,785 Speaker 2: planning to have this first major event outside of the 79 00:03:48,796 --> 00:03:51,076 Speaker 2: US where it's been running for more than 100 years 80 00:03:51,085 --> 00:03:53,945 Speaker 2: and it has thousands of participants and anyone in the 81 00:03:53,955 --> 00:03:55,856 Speaker 2: retail space seems to know all about 82 00:03:55,934 --> 00:03:59,533 Speaker 2: conference even around the world. But then COVID happened and 83 00:03:59,544 --> 00:04:01,184 Speaker 2: so they had to wait until they got to the 84 00:04:01,194 --> 00:04:03,414 Speaker 2: right time when it would feel a bit easier to 85 00:04:03,423 --> 00:04:05,934 Speaker 2: be going ahead with something like this. And so it 86 00:04:05,944 --> 00:04:09,574 Speaker 2: was thousands of people at the Marina Bay sands coming 87 00:04:09,583 --> 00:04:13,033 Speaker 2: in from, as the organizers told me around 40 different markets, 88 00:04:13,044 --> 00:04:13,914 Speaker 2: people were coming in 89 00:04:13,923 --> 00:04:15,994 Speaker 1: from not just American retailers. Oh no, 90 00:04:16,003 --> 00:04:18,813 Speaker 2: this was retailers from, you name the place, there was 91 00:04:18,824 --> 00:04:22,674 Speaker 2: someone there from literally anywhere I could think of. They 92 00:04:22,683 --> 00:04:24,514 Speaker 2: were like, yep, there's someone who's come in from there 93 00:04:24,880 --> 00:04:27,260 Speaker 2: and you had this sort of the, the, the sort 94 00:04:27,272 --> 00:04:29,891 Speaker 2: of set up where you have the whole exhibition hall 95 00:04:29,902 --> 00:04:33,371 Speaker 2: with the various vendors and people from all types of areas. 96 00:04:33,380 --> 00:04:36,682 Speaker 2: But then also the actual main event space where they 97 00:04:36,690 --> 00:04:40,272 Speaker 2: had speakers, for example, uh the head of Don Don Donkey, 98 00:04:40,282 --> 00:04:42,971 Speaker 2: for example. And that was very exciting to uh to 99 00:04:42,981 --> 00:04:46,022 Speaker 2: hear the story of how Japan and, and a company 100 00:04:46,032 --> 00:04:48,372 Speaker 2: that's been so successful in Japan, how they've done it 101 00:04:48,541 --> 00:04:51,432 Speaker 2: and also what their plans are for the future. Ok, 102 00:04:51,440 --> 00:04:51,601 Speaker 1: we 103 00:04:51,611 --> 00:04:53,171 Speaker 1: can probably spend many hours just 104 00:04:53,250 --> 00:04:55,279 Speaker 1: talking about the scope of a conference like this. I'm 105 00:04:55,290 --> 00:04:59,220 Speaker 1: super curious but give me some top line takeaways. How 106 00:04:59,230 --> 00:05:01,988 Speaker 1: are the retailers feeling in the middle of 2024? 107 00:05:02,000 --> 00:05:03,290 Speaker 2: Well, it's, it's, 108 00:05:03,299 --> 00:05:06,570 Speaker 2: it's one of these times where there's plenty of reason 109 00:05:06,579 --> 00:05:09,399 Speaker 2: for excitement in particular for this region, sort of things 110 00:05:09,410 --> 00:05:11,260 Speaker 2: that we would have been talking about. So from a 111 00:05:11,269 --> 00:05:15,190 Speaker 2: broader growth drivers perspective even say 10 years ago where 112 00:05:15,200 --> 00:05:17,920 Speaker 2: it was quite clear, the center of economic gravity had 113 00:05:17,928 --> 00:05:20,549 Speaker 2: been shifting east and it's not really changing. I would 114 00:05:20,559 --> 00:05:21,859 Speaker 2: argue even with the slowdown 115 00:05:22,238 --> 00:05:25,048 Speaker 2: in the trend pace of growth in for example, China, 116 00:05:25,058 --> 00:05:27,808 Speaker 2: you do still have the strength, for example, in India 117 00:05:27,838 --> 00:05:30,847 Speaker 2: and the contributions to global growth being so big. That 118 00:05:30,858 --> 00:05:33,798 Speaker 2: exciting story, I think is something that retailers are still 119 00:05:33,808 --> 00:05:36,876 Speaker 2: very focused on the rise of consumers, the growth in 120 00:05:36,888 --> 00:05:40,268 Speaker 2: middle class and higher income consumers that I would say 121 00:05:40,278 --> 00:05:42,838 Speaker 2: is the biggest long term part of the story that 122 00:05:42,847 --> 00:05:46,227 Speaker 2: people were were really really wanted to talk about. But 123 00:05:46,238 --> 00:05:49,166 Speaker 2: of course, there are shorter term challenges that come from 124 00:05:49,178 --> 00:05:50,488 Speaker 2: the rise in the cost of living 125 00:05:50,565 --> 00:05:54,575 Speaker 2: the higher levels of interest rates, the persistence of particularly 126 00:05:54,585 --> 00:05:57,235 Speaker 2: us interest rates being as high as they are, how 127 00:05:57,246 --> 00:05:59,656 Speaker 2: long and how quickly they come down. Of course, was 128 00:05:59,665 --> 00:06:02,395 Speaker 2: a major question that was coming up quite often because 129 00:06:02,406 --> 00:06:05,555 Speaker 2: it matters for markets in this region. Too take, for example, Indonesia, 130 00:06:05,565 --> 00:06:08,044 Speaker 2: where we've seen interest rates going up, where really it 131 00:06:08,055 --> 00:06:11,216 Speaker 2: was more about the external defense that the keeping the 132 00:06:11,226 --> 00:06:14,015 Speaker 2: currency from going much weaker rather than it being for 133 00:06:14,026 --> 00:06:17,276 Speaker 2: domestic reasons themselves. Even here in Singapore, we're seeing with 134 00:06:17,286 --> 00:06:19,145 Speaker 2: say the retail sales numbers 135 00:06:19,450 --> 00:06:22,339 Speaker 2: year on year have been softening and we know the 136 00:06:22,350 --> 00:06:25,450 Speaker 2: cost of living, the cost of interest are major factors 137 00:06:25,459 --> 00:06:27,118 Speaker 2: that are playing a role in that. So for a 138 00:06:27,130 --> 00:06:30,200 Speaker 2: lot of retailers, what they're trying to do is navigate 139 00:06:30,209 --> 00:06:33,589 Speaker 2: this challenging short term environment space. And a key way 140 00:06:33,600 --> 00:06:36,109 Speaker 2: to do it is to think about how they can 141 00:06:36,119 --> 00:06:41,040 Speaker 2: retain and gain new customers, draw customers in through personalization 142 00:06:41,049 --> 00:06:43,390 Speaker 2: services or loyalty programs. 143 00:06:43,570 --> 00:06:45,790 Speaker 2: What types of offerings they can actually come up with 144 00:06:45,799 --> 00:06:49,510 Speaker 2: how to segment the customer groups and also how to 145 00:06:49,519 --> 00:06:52,178 Speaker 2: think about what else they could be doing for alternative, 146 00:06:52,190 --> 00:06:55,769 Speaker 2: not just marketing but direct sales channels getting involved in 147 00:06:55,779 --> 00:06:59,829 Speaker 2: say marketplaces or directly selling and that role of ecommerce. 148 00:06:59,839 --> 00:07:02,339 Speaker 2: Of course, all with these things coming up, talking to 149 00:07:02,350 --> 00:07:04,609 Speaker 2: someone like mastercard was ok. We want to do more 150 00:07:04,619 --> 00:07:06,308 Speaker 2: of this. But also how do we do it in 151 00:07:06,320 --> 00:07:07,469 Speaker 2: a safe and secure way? 152 00:07:07,690 --> 00:07:11,799 Speaker 1: Sure, I just hope they're not pushing BNPL more because 153 00:07:11,809 --> 00:07:14,049 Speaker 1: this whole buy now pay later in my view at 154 00:07:14,059 --> 00:07:16,119 Speaker 1: this time, the cycle was raised being where they are 155 00:07:16,130 --> 00:07:17,920 Speaker 1: is a recipe for stress. 156 00:07:18,130 --> 00:07:20,279 Speaker 2: Well, it's one of those things where you look at 157 00:07:20,290 --> 00:07:24,470 Speaker 2: the different sources say B NPL, that had been certainly 158 00:07:24,480 --> 00:07:27,130 Speaker 2: something that grew very strongly, I think at first in Australia. 159 00:07:27,179 --> 00:07:29,910 Speaker 2: But what's interesting about it though? And I, I do 160 00:07:29,920 --> 00:07:31,709 Speaker 2: agree that there are certain areas where you've, 161 00:07:31,809 --> 00:07:34,790 Speaker 2: it's just got to be cautious on adding to the 162 00:07:34,799 --> 00:07:38,299 Speaker 2: amount of what is effectively credit at times when consumers 163 00:07:38,309 --> 00:07:40,850 Speaker 2: are more stressed. But at the same time, it was 164 00:07:40,859 --> 00:07:44,019 Speaker 2: offering something where at least consumers were feeling ok. I 165 00:07:44,029 --> 00:07:47,059 Speaker 2: just have four equal payments to make. There's no interest 166 00:07:47,070 --> 00:07:48,829 Speaker 2: on it. But of course, it needs to be done 167 00:07:48,839 --> 00:07:51,200 Speaker 2: in a way where people actually are able to do 168 00:07:51,209 --> 00:07:53,458 Speaker 2: that and it actually just helps them with their cash 169 00:07:53,470 --> 00:07:55,829 Speaker 2: flows rather than ends up seeing 170 00:07:55,929 --> 00:07:58,429 Speaker 2: them in more stressed positions. But it is an interesting 171 00:07:58,440 --> 00:08:02,670 Speaker 2: application of an older type of idea that's been reapplied 172 00:08:02,679 --> 00:08:05,519 Speaker 2: with modern technology thrown in. And I think from that perspective, 173 00:08:05,529 --> 00:08:06,869 Speaker 2: I think that's quite interesting, right? 174 00:08:06,880 --> 00:08:06,910 Speaker 1: I 175 00:08:06,920 --> 00:08:10,540 Speaker 1: mean, I think I've seen reference to installment payments, you know, 176 00:08:10,549 --> 00:08:12,970 Speaker 1: in South Asia, you know, decades ago, even before the 177 00:08:12,980 --> 00:08:16,220 Speaker 1: ecommerce was a thing. I also know that Apple recently 178 00:08:16,230 --> 00:08:18,959 Speaker 1: discontinued doing B and P I think it came out 179 00:08:18,970 --> 00:08:19,910 Speaker 1: just a week ago or so. 180 00:08:20,279 --> 00:08:24,179 Speaker 1: Um So David uh from these, these retailers who have 181 00:08:24,190 --> 00:08:27,049 Speaker 1: gathered from all over the world in Singapore, I mean, 182 00:08:27,059 --> 00:08:29,329 Speaker 1: did they pick Singapore because it's just a nice comfortable 183 00:08:29,339 --> 00:08:31,170 Speaker 1: travel destination or they see 184 00:08:31,589 --> 00:08:35,488 Speaker 1: regional hub for retail being in Singapore as a business proposition. 185 00:08:35,789 --> 00:08:37,919 Speaker 2: I think it was a little bit of both. Certainly 186 00:08:37,929 --> 00:08:40,270 Speaker 2: the organizers that when I was talking to them, they 187 00:08:40,280 --> 00:08:43,349 Speaker 2: did their homework on where should this be based? And 188 00:08:43,359 --> 00:08:46,960 Speaker 2: they came back with the overwhelming feedback. It should be Singapore. 189 00:08:46,969 --> 00:08:48,849 Speaker 2: That made the most sense. I think you're right. The 190 00:08:48,859 --> 00:08:51,780 Speaker 2: ease of travel in and out is clearly playing a 191 00:08:51,789 --> 00:08:53,770 Speaker 2: big role in that wherever you want to come from 192 00:08:53,780 --> 00:08:55,590 Speaker 2: around the region, it's a, it's a 193 00:08:55,658 --> 00:08:58,987 Speaker 2: key hub in that regard. And also I think the, well, 194 00:08:58,997 --> 00:09:01,757 Speaker 2: the the the the actual conference space itself, the ability 195 00:09:01,768 --> 00:09:04,718 Speaker 2: to network the sort of availability of of accommodations made 196 00:09:04,727 --> 00:09:08,047 Speaker 2: it much, much simpler. Um But I think also it 197 00:09:08,057 --> 00:09:09,908 Speaker 2: is a place where you still do see that bias 198 00:09:09,918 --> 00:09:13,418 Speaker 2: on having regional hubs and picking Singapore as a location 199 00:09:13,427 --> 00:09:16,117 Speaker 2: for that. I think that's something that is, is very, 200 00:09:16,127 --> 00:09:18,877 Speaker 2: I think quite persistent really, even though there's lots of 201 00:09:18,888 --> 00:09:19,638 Speaker 2: other places that are 202 00:09:19,726 --> 00:09:22,585 Speaker 2: looking to try and take some of that sort of role, 203 00:09:22,596 --> 00:09:25,476 Speaker 2: it does look like Singapore is still in a leading position, 204 00:09:25,486 --> 00:09:28,906 Speaker 2: especially at a time when there's been more problems and 205 00:09:28,916 --> 00:09:32,616 Speaker 2: issues or questions over elsewhere, including say in Northeast Asia, 206 00:09:32,625 --> 00:09:33,434 Speaker 2: including Hong Kong. 207 00:09:33,445 --> 00:09:33,656 Speaker 1: That's 208 00:09:33,666 --> 00:09:35,546 Speaker 1: right. And I hope I'm not wrong when I say 209 00:09:35,556 --> 00:09:37,806 Speaker 1: that mastercards Regional Headquarters also Singapore. Yes, 210 00:09:37,815 --> 00:09:38,665 Speaker 2: that's right. Yes. Yes, 211 00:09:39,856 --> 00:09:43,705 Speaker 1: travel trends. 2024. You send me a link to the 212 00:09:43,794 --> 00:09:46,443 Speaker 1: report. I found it really interesting. I wish we could 213 00:09:46,453 --> 00:09:48,723 Speaker 1: have done like an interactive show where we can show 214 00:09:48,783 --> 00:09:52,392 Speaker 1: off your charts. But this time audio podcast with, on 215 00:09:52,403 --> 00:09:55,624 Speaker 1: the video, only us showing our faces tell me about 216 00:09:55,633 --> 00:09:56,693 Speaker 1: travel trends. 2020 217 00:09:56,703 --> 00:09:59,294 Speaker 2: four. Yeah, I mean, maybe next time next to this 218 00:09:59,304 --> 00:10:01,564 Speaker 2: nice greenery in the background, we can put a screen 219 00:10:01,573 --> 00:10:05,054 Speaker 2: up and I can start out with some of the Absolutely. 220 00:10:05,064 --> 00:10:07,773 Speaker 2: And it's actually on the Mastercard Services website. It 221 00:10:07,861 --> 00:10:09,872 Speaker 2: there's no gate gating on 222 00:10:09,881 --> 00:10:09,910 Speaker 2: it. 223 00:10:09,921 --> 00:10:11,731 Speaker 1: We'll put the link in the show notes of the great. 224 00:10:12,921 --> 00:10:15,392 Speaker 2: So what we do each year is and I think 225 00:10:15,401 --> 00:10:17,660 Speaker 2: it's now the fifth year that we've done this where 226 00:10:17,671 --> 00:10:21,021 Speaker 2: we've done a travel report for the world. And what 227 00:10:21,030 --> 00:10:22,641 Speaker 2: we try and do each time is think of what's 228 00:10:22,651 --> 00:10:25,122 Speaker 2: the new view that we could build? What are the 229 00:10:25,131 --> 00:10:28,492 Speaker 2: extra points that would reinforce some of the interesting thematics 230 00:10:28,502 --> 00:10:30,981 Speaker 2: that are coming out. So part of the story, firstly 231 00:10:30,992 --> 00:10:31,790 Speaker 2: on travel 232 00:10:32,099 --> 00:10:35,130 Speaker 2: is that while there are challenges on broader consumer stories, 233 00:10:35,229 --> 00:10:39,059 Speaker 2: we are still not done on the recovery of travel 234 00:10:39,070 --> 00:10:41,799 Speaker 2: in this region that the pandemic since the pandemic, like 235 00:10:41,809 --> 00:10:45,440 Speaker 2: levels of say just passenger volumes are not in general. 236 00:10:45,450 --> 00:10:48,440 Speaker 2: Some exceptions, which I'll come on to especially the Japan story, 237 00:10:48,450 --> 00:10:50,690 Speaker 2: which has been dominating a lot of the stories and 238 00:10:50,700 --> 00:10:51,919 Speaker 2: and attention for good reason. 239 00:10:52,289 --> 00:10:54,530 Speaker 2: Actually, we're not fully recovered. If you take the example 240 00:10:54,539 --> 00:10:59,650 Speaker 2: of China, we're only around 83% recovered of passenger outbound 241 00:10:59,659 --> 00:11:04,530 Speaker 2: international volumes versus 2019. You compare that to domestic volumes 242 00:11:04,539 --> 00:11:07,859 Speaker 2: that had fully recovered even more than a year ago. 243 00:11:08,210 --> 00:11:11,099 Speaker 2: So there's a big divergence story that we're seeing there. 244 00:11:11,109 --> 00:11:13,250 Speaker 2: And of course, this matters the most because 245 00:11:13,474 --> 00:11:18,194 Speaker 2: pandemic China was the most important spending traveler worldwide. It 246 00:11:18,205 --> 00:11:21,473 Speaker 2: was actually even a big macroeconomic topic actually of just 247 00:11:21,484 --> 00:11:24,344 Speaker 2: how much of the services balance on the current account 248 00:11:24,354 --> 00:11:28,194 Speaker 2: actually was being dragged down by the expenditure of travelers 249 00:11:28,205 --> 00:11:31,344 Speaker 2: abroad on a net basis right now. Interestingly, we just launched, 250 00:11:31,354 --> 00:11:34,465 Speaker 2: relaunched the priceless Beijing experience 251 00:11:34,950 --> 00:11:38,049 Speaker 2: uh just literally a few days ago. And part of 252 00:11:38,059 --> 00:11:40,539 Speaker 2: the timing of doing it, one was uh with our 253 00:11:40,549 --> 00:11:44,309 Speaker 2: operations in China growing in that way, more acceptance points 254 00:11:44,460 --> 00:11:47,210 Speaker 2: uh that it was becoming a big story. But also 255 00:11:47,260 --> 00:11:49,270 Speaker 2: you may be noting, I I certainly have been seeing 256 00:11:49,280 --> 00:11:52,989 Speaker 2: more adverts uh for the wonderful things you can do 257 00:11:53,320 --> 00:11:56,400 Speaker 2: on a trip as a tourist coming into China. And 258 00:11:56,409 --> 00:11:59,380 Speaker 2: to your point earlier, the big challenge had been making 259 00:11:59,390 --> 00:12:02,469 Speaker 2: payments as a foreign visitor in China has not always 260 00:12:02,479 --> 00:12:05,890 Speaker 2: been so easy. It's changing right now. It's changing in 261 00:12:05,900 --> 00:12:08,119 Speaker 2: a big way. You mentioned, you're able to say put 262 00:12:08,130 --> 00:12:12,280 Speaker 2: your mastercard into big relief into your wallet that is 263 00:12:12,289 --> 00:12:15,049 Speaker 2: accepted and that means all the acceptance points just light 264 00:12:15,059 --> 00:12:16,289 Speaker 2: up straight away, but even 265 00:12:16,395 --> 00:12:18,664 Speaker 2: directly to be able to just go in and use 266 00:12:18,674 --> 00:12:22,054 Speaker 2: the mastercard directly in multiple more acceptance points. That's something 267 00:12:22,104 --> 00:12:25,603 Speaker 2: that's growing very rapidly. So now what, so that net 268 00:12:25,614 --> 00:12:28,694 Speaker 2: number might get a little bit more balanced if indeed 269 00:12:28,705 --> 00:12:30,854 Speaker 2: we do start to see a lot more travelers coming in. 270 00:12:30,864 --> 00:12:33,864 Speaker 2: There's certainly plenty of exciting, interesting things to do uh 271 00:12:33,875 --> 00:12:37,294 Speaker 2: when visiting China, many cultural uh locations that I think 272 00:12:37,304 --> 00:12:39,604 Speaker 2: many people would love to, to go and see. Uh 273 00:12:39,614 --> 00:12:42,294 Speaker 2: now on the travel side though, coming back to it, 274 00:12:42,304 --> 00:12:44,525 Speaker 2: the full recovery was seen in Japan. 275 00:12:45,179 --> 00:12:48,728 Speaker 2: So inbound travelers in particular, coming from places where the 276 00:12:48,739 --> 00:12:52,419 Speaker 2: FX had become particularly attractive. And a great example of 277 00:12:52,429 --> 00:12:55,369 Speaker 2: this is Singapore into Japan as a corridor 278 00:12:55,380 --> 00:12:57,189 Speaker 1: armstrong exchange rate vis over the yen. 279 00:12:57,200 --> 00:13:00,130 Speaker 2: That's right, that sort of move that, that it's been 280 00:13:00,140 --> 00:13:02,669 Speaker 2: a 38% move since early 22 281 00:13:02,724 --> 00:13:05,484 Speaker 2: 22. That type of move actually, not only did it 282 00:13:05,494 --> 00:13:09,593 Speaker 2: attract that extra volume. So that corridor has been really booming. 283 00:13:09,604 --> 00:13:12,174 Speaker 2: It's more than 40% above where it had been pre 284 00:13:12,215 --> 00:13:15,704 Speaker 2: pandemic compared to other corridors that have not really come back. 285 00:13:15,715 --> 00:13:17,844 Speaker 2: And we can talk about the Thailand story as well 286 00:13:17,854 --> 00:13:19,424 Speaker 2: if you like a little bit later. But on the 287 00:13:19,434 --> 00:13:20,184 Speaker 2: Japan one 288 00:13:20,820 --> 00:13:23,640 Speaker 2: that F FX rate has not just been this big move, 289 00:13:23,650 --> 00:13:26,319 Speaker 2: attracting people in to just go and have their holiday there, 290 00:13:26,330 --> 00:13:29,460 Speaker 2: it's even changed what people do when they go there 291 00:13:29,469 --> 00:13:33,510 Speaker 2: because in general, since the ending of COVID restrictions worldwide 292 00:13:33,520 --> 00:13:36,679 Speaker 2: when it comes to travel, we have been seeing experiences 293 00:13:36,780 --> 00:13:39,478 Speaker 2: dominating what people wanted to spend on. It was all 294 00:13:39,489 --> 00:13:42,650 Speaker 2: about go to that fine dining experience or go to 295 00:13:42,659 --> 00:13:46,390 Speaker 2: the restaurant be with people concerts. Of course, the Taylor 296 00:13:46,400 --> 00:13:48,780 Speaker 2: Swift concerts were a big one. We've been focusing on 297 00:13:48,820 --> 00:13:52,179 Speaker 2: a lot over the last uh last 6 to 12 months. 298 00:13:52,190 --> 00:13:52,830 Speaker 2: But I think 299 00:13:53,260 --> 00:13:56,440 Speaker 2: this story of inbound into Japan was not just experience it. 300 00:13:56,450 --> 00:14:00,098 Speaker 2: We actually were seeing the share of wallet going up 301 00:14:00,109 --> 00:14:04,869 Speaker 2: quite dramatically, particularly on retail for the markets, the inbound 302 00:14:04,880 --> 00:14:07,710 Speaker 2: markets say Singapore or us where the FX was so 303 00:14:07,719 --> 00:14:10,549 Speaker 2: attractive because you can go there and it's really good 304 00:14:10,559 --> 00:14:13,090 Speaker 2: value going to the stores. So it was not just 305 00:14:13,099 --> 00:14:15,169 Speaker 2: about experiences. It was also about things 306 00:14:15,245 --> 00:14:18,726 Speaker 2: when it came to Japan, the transaction volume sizes were there, 307 00:14:18,736 --> 00:14:21,145 Speaker 2: the growth rate was clearly there. You could really see 308 00:14:21,156 --> 00:14:25,505 Speaker 2: the impact of big FX moves in driving traveler behavior 309 00:14:25,515 --> 00:14:28,236 Speaker 2: even actually, it was just in Thailand recently talking this 310 00:14:28,245 --> 00:14:31,166 Speaker 2: through on that corridor and actually even Thai visitors to 311 00:14:31,176 --> 00:14:34,096 Speaker 2: Japan were also breaking with the cliche of it all 312 00:14:34,106 --> 00:14:37,135 Speaker 2: being about experiences and you were seeing there also retail 313 00:14:37,231 --> 00:14:40,411 Speaker 2: spending doing particularly well because even though the Thai baht 314 00:14:40,421 --> 00:14:43,431 Speaker 2: has not exactly been very strong, it has been against 315 00:14:43,442 --> 00:14:45,331 Speaker 2: the yen. That's right. I think that's the other big 316 00:14:45,341 --> 00:14:47,502 Speaker 2: one that along with the Korean one actually or two 317 00:14:47,512 --> 00:14:50,161 Speaker 2: that have actually become quite attractive in that way because 318 00:14:50,171 --> 00:14:52,211 Speaker 2: of the pricing moves in the FX 319 00:14:52,221 --> 00:14:55,252 Speaker 1: rate, right? In my China trip. A few weeks ago, 320 00:14:55,262 --> 00:14:57,771 Speaker 1: first thing I realized that Shanghai is only a couple 321 00:14:57,781 --> 00:14:59,132 Speaker 1: of hours by plane from Tokyo 322 00:14:59,369 --> 00:15:01,830 Speaker 1: and in Tokyo, if you go to a retailer coming 323 00:15:01,840 --> 00:15:04,270 Speaker 1: from mainland China, they will immediately show you the price 324 00:15:04,280 --> 00:15:07,270 Speaker 1: comparison that in RMB, you pay this much in yen, 325 00:15:07,280 --> 00:15:09,320 Speaker 1: you pay this much. So it's of course, a value 326 00:15:09,330 --> 00:15:13,789 Speaker 1: proposition you should buy. So to your point of patterns 327 00:15:13,799 --> 00:15:18,270 Speaker 1: of spending changing and the orientation of tourists changing. 328 00:15:18,500 --> 00:15:21,030 Speaker 1: Um Do you see this like as you just mentioned 329 00:15:21,039 --> 00:15:24,130 Speaker 1: in Thailand, perhaps also if you can share some views 330 00:15:24,140 --> 00:15:28,599 Speaker 1: on Indonesia, Philippines, Vietnam and so on that, this slowdown 331 00:15:28,609 --> 00:15:31,159 Speaker 1: in Chinese outbound tourism into this part of the world. 332 00:15:31,419 --> 00:15:34,840 Speaker 1: Um How deep is it uh is it being offset by, 333 00:15:34,849 --> 00:15:37,479 Speaker 1: I don't know Russian tourism or American tourism? 334 00:15:37,900 --> 00:15:41,200 Speaker 2: Well, certainly into Japan, the US inbound tourism has also 335 00:15:41,210 --> 00:15:44,719 Speaker 2: been helping to make up for some of the, the 336 00:15:44,729 --> 00:15:47,479 Speaker 2: the the gap left behind, let's say by not yet 337 00:15:47,489 --> 00:15:51,169 Speaker 2: being fully recovered on the China inbound uh China tourists 338 00:15:51,179 --> 00:15:52,520 Speaker 2: going in to Japan, 339 00:15:52,875 --> 00:15:56,174 Speaker 2: that's for sure. Now, whether we're going to see with 340 00:15:56,184 --> 00:15:58,575 Speaker 2: some of these changes, that's being also the long term 341 00:15:58,585 --> 00:16:01,515 Speaker 2: story too. Uh I think actually we probably will where 342 00:16:01,525 --> 00:16:03,864 Speaker 2: actually yes, the China side will come back. But the 343 00:16:03,875 --> 00:16:06,674 Speaker 2: strength of the ASEAN demand particularly say it was just 344 00:16:06,684 --> 00:16:10,544 Speaker 2: in Thailand, that corridor of other ASEAN economies with tourists 345 00:16:10,554 --> 00:16:13,664 Speaker 2: coming into Thailand from the ASEAN has already 346 00:16:14,020 --> 00:16:16,859 Speaker 2: exceeded where it was. And the spending numbers are quite 347 00:16:16,869 --> 00:16:19,030 Speaker 2: strong too. And I think this actually comes back to 348 00:16:19,039 --> 00:16:21,130 Speaker 2: the point I mentioned at the beginning about the excitement 349 00:16:21,140 --> 00:16:24,250 Speaker 2: of retailers, which is, it's not all about just thinking 350 00:16:24,260 --> 00:16:27,299 Speaker 2: of when global growth comes from thinking, oh, the US 351 00:16:27,309 --> 00:16:29,609 Speaker 2: and then Europe, they're really thinking about, well, what's the 352 00:16:29,619 --> 00:16:33,200 Speaker 2: India story? What's the story in Indonesia? And actually the 353 00:16:33,335 --> 00:16:35,905 Speaker 2: a story another one again, in terms of inbound into 354 00:16:35,914 --> 00:16:39,395 Speaker 2: Thailand has become exciting because for travelers from India, a 355 00:16:39,405 --> 00:16:42,635 Speaker 2: number of markets had been easing off on visa restrictions. 356 00:16:42,645 --> 00:16:44,715 Speaker 2: Part of the reason being, well, that's a great way 357 00:16:44,724 --> 00:16:48,395 Speaker 2: of making up for some of the relative underperformance of 358 00:16:48,405 --> 00:16:51,005 Speaker 2: travelers coming in from elsewhere. And when you look at 359 00:16:51,015 --> 00:16:52,405 Speaker 2: the sheer volume of say 360 00:16:52,849 --> 00:16:56,909 Speaker 2: infrastructure build out air airplanes on order. Uh that we 361 00:16:56,919 --> 00:16:58,979 Speaker 2: think about the India market, we think of the volumes 362 00:16:58,989 --> 00:17:01,849 Speaker 2: of extra people, middle class and above that is just 363 00:17:01,859 --> 00:17:04,869 Speaker 2: growing continuously over the next five years, more than 20 364 00:17:04,880 --> 00:17:07,589 Speaker 2: million people we think will be added into say the 365 00:17:07,599 --> 00:17:10,209 Speaker 2: middle class groups. It's not just for domestic travel that 366 00:17:10,219 --> 00:17:12,669 Speaker 2: they'll want to do, they'll go beyond the things and 367 00:17:12,680 --> 00:17:16,000 Speaker 2: into the experiences realm. It will be doing these international 368 00:17:16,010 --> 00:17:16,900 Speaker 2: trips as well. 369 00:17:17,218 --> 00:17:19,917 Speaker 1: It is absolutely fascinating. I fully agree with you, the 370 00:17:19,928 --> 00:17:23,279 Speaker 1: increasing purchasing power of the upper middle class and the 371 00:17:23,288 --> 00:17:25,779 Speaker 1: high income cohort of Indians. I think it's going to 372 00:17:25,788 --> 00:17:29,848 Speaker 1: be if not as transformational as the Chinese wealth impact 373 00:17:29,859 --> 00:17:32,338 Speaker 1: in the two thousands. But it will be pretty big 374 00:17:32,348 --> 00:17:37,619 Speaker 1: up there. From a value proposition perspective, hosting a wedding 375 00:17:37,629 --> 00:17:40,808 Speaker 1: in Goa is more expensive than hosting it in Phuket. 376 00:17:40,989 --> 00:17:42,718 Speaker 1: So for Indian 377 00:17:42,826 --> 00:17:46,475 Speaker 1: festival goers and people who want to arrange special family events, 378 00:17:46,526 --> 00:17:49,026 Speaker 1: I think talent is a very good value proposition. Even 379 00:17:49,036 --> 00:17:51,005 Speaker 1: though the bath is not as weak as the yen, 380 00:17:51,015 --> 00:17:51,776 Speaker 1: they still offer great 381 00:17:51,786 --> 00:17:54,275 Speaker 2: value. There's still good value in there. And actually you 382 00:17:54,286 --> 00:17:56,125 Speaker 2: mentioned that story. I think I literally saw two or 383 00:17:56,135 --> 00:17:57,786 Speaker 2: three weddings in the week and a half that I 384 00:17:57,796 --> 00:18:00,004 Speaker 2: was on a holiday in one of the hotels in. 385 00:18:00,515 --> 00:18:00,546 Speaker 2: There 386 00:18:00,715 --> 00:18:00,734 Speaker 1: you 387 00:18:00,776 --> 00:18:03,035 Speaker 1: go, there you go. Um Let's talk a little bit 388 00:18:03,046 --> 00:18:05,686 Speaker 1: more about Singapore. If I'm not mistaken, Singapore is the 389 00:18:05,696 --> 00:18:08,326 Speaker 1: only country in ASEAN where the travel 390 00:18:08,432 --> 00:18:11,371 Speaker 1: tourism is basically back to pre pandemic levels everywhere else. 391 00:18:11,381 --> 00:18:12,251 Speaker 1: It's still lagging. 392 00:18:12,261 --> 00:18:15,661 Speaker 2: There is still, well, we had almost fully come back 393 00:18:15,671 --> 00:18:17,331 Speaker 2: and then it eased off a little bit in the 394 00:18:17,342 --> 00:18:20,111 Speaker 2: most recent data. So we're still below say 90% in 395 00:18:20,121 --> 00:18:22,531 Speaker 2: terms of the volumes. But you're right in terms of say, 396 00:18:22,541 --> 00:18:25,832 Speaker 2: total expenditure that's coming in from the inbound tourists. It 397 00:18:25,842 --> 00:18:29,322 Speaker 2: has made that that pretty much full comeback, but we're 398 00:18:29,332 --> 00:18:31,501 Speaker 2: not fully, we're not all the way over where we 399 00:18:31,511 --> 00:18:33,972 Speaker 2: were in 2019, I would say part of the reason 400 00:18:34,219 --> 00:18:36,959 Speaker 2: is actually the flip side of the Japan story. It's 401 00:18:36,969 --> 00:18:40,139 Speaker 2: expensive here when you have a currency. And even, let's 402 00:18:40,150 --> 00:18:43,219 Speaker 2: say the Singapore dollar broadly, it's been as strong as 403 00:18:43,229 --> 00:18:45,550 Speaker 2: the US dollar, let's say, certainly it's been stronger than 404 00:18:45,650 --> 00:18:48,119 Speaker 2: any of the other currencies around the region. It has 405 00:18:48,130 --> 00:18:51,560 Speaker 2: meant that there's been this uh and it's actually changed 406 00:18:51,569 --> 00:18:54,000 Speaker 2: some of the consumer spending behavior for Singapore as well 407 00:18:54,010 --> 00:18:56,579 Speaker 2: because we know, let, let, let's think about firstly the 408 00:18:56,589 --> 00:18:58,349 Speaker 2: outbound story for Singapore and then we can go on 409 00:18:58,359 --> 00:18:59,910 Speaker 2: the inbound outbound 410 00:19:00,229 --> 00:19:03,938 Speaker 2: for the uh broader mass market consumers. We actually have 411 00:19:03,949 --> 00:19:06,530 Speaker 2: noted there's been a slight drop in the share of 412 00:19:06,540 --> 00:19:10,129 Speaker 2: the wallet of spending actually going on travel. And now 413 00:19:10,140 --> 00:19:13,130 Speaker 2: we're thinking, well, why would this be Singapore dollar so strong? 414 00:19:13,219 --> 00:19:18,149 Speaker 2: It's particularly strong against regional currencies. So actually, there's more 415 00:19:18,160 --> 00:19:20,849 Speaker 2: of that attractiveness of taking the budget flights, taking the 416 00:19:20,859 --> 00:19:22,530 Speaker 2: shorter haul flights, 417 00:19:22,609 --> 00:19:25,709 Speaker 2: let's say around the region and doing your holidays there, 418 00:19:25,719 --> 00:19:27,949 Speaker 2: maybe as far as Japan. Of course, we know that's 419 00:19:27,959 --> 00:19:31,270 Speaker 2: the case but elsewhere to say Thailand, because it's such 420 00:19:31,280 --> 00:19:34,099 Speaker 2: good value. And so the the consumers for sure with 421 00:19:34,109 --> 00:19:36,829 Speaker 2: this world, we've been in with the spike in inflation, 422 00:19:36,839 --> 00:19:39,629 Speaker 2: the spike in interest rates, everyone looking at some ways 423 00:19:39,640 --> 00:19:43,380 Speaker 2: of trading down on certain essential goods, which has even 424 00:19:43,390 --> 00:19:44,899 Speaker 2: with that being the case, 425 00:19:45,219 --> 00:19:48,000 Speaker 2: taking up a bigger portion of the share of wallet. 426 00:19:48,010 --> 00:19:50,659 Speaker 2: What we really need to see next that consumers are 427 00:19:50,670 --> 00:19:52,839 Speaker 2: looking at is where can I find some of those savings? 428 00:19:52,849 --> 00:19:54,959 Speaker 2: And of course, traveling regionally, you still get your travel 429 00:19:54,969 --> 00:19:58,199 Speaker 2: experience and you've got the value proposition as well right 430 00:19:58,500 --> 00:20:00,989 Speaker 2: now on the inbound side, of course, yes, it's become 431 00:20:01,000 --> 00:20:04,859 Speaker 2: a more expensive place for coming in to visit. And 432 00:20:04,869 --> 00:20:08,280 Speaker 2: because of the exchange rate, that does mean that for example, 433 00:20:08,290 --> 00:20:10,839 Speaker 2: say travelers coming in from say Indonesia, do you find 434 00:20:10,941 --> 00:20:14,380 Speaker 2: more expensive at this point? Of course, everything can change, 435 00:20:14,390 --> 00:20:16,681 Speaker 2: let's say in another year from now as and when 436 00:20:16,691 --> 00:20:19,941 Speaker 2: we may get the interest rate cutting cycle actually really 437 00:20:19,951 --> 00:20:22,020 Speaker 2: getting going from the United States. 438 00:20:22,211 --> 00:20:24,201 Speaker 1: But also for the Indonesians. If they want to watch 439 00:20:24,211 --> 00:20:26,240 Speaker 1: Taylor Swift, there's only one place to go in Asia, 440 00:20:26,250 --> 00:20:26,750 Speaker 2: right? And 441 00:20:26,760 --> 00:20:29,680 Speaker 2: actually we did note on that front that when we 442 00:20:29,691 --> 00:20:33,660 Speaker 2: look into say the restaurant spending around the sort of 443 00:20:33,671 --> 00:20:36,469 Speaker 2: areas that were close enough to the venue for the 444 00:20:36,732 --> 00:20:40,082 Speaker 2: of concerts, we saw a major lift like 25% plus 445 00:20:40,092 --> 00:20:42,482 Speaker 2: lift in spending over that period of the Taylor Swift 446 00:20:42,491 --> 00:20:45,241 Speaker 2: concerts with the biggest driver on the cross border coming 447 00:20:45,251 --> 00:20:46,311 Speaker 2: actually from the Philippines. 448 00:20:46,541 --> 00:20:49,171 Speaker 1: Yes, I should correct myself in Southeast Asia because she 449 00:20:49,182 --> 00:20:51,942 Speaker 1: did go to Japan. But the reason I'm sort of 450 00:20:51,952 --> 00:20:55,001 Speaker 1: focusing on this point is that for a country like Singapore, 451 00:20:55,011 --> 00:20:57,602 Speaker 1: I think the contrast with Indonesia is interesting one Indonesia 452 00:20:57,612 --> 00:21:02,261 Speaker 1: is cheaper, the has been weak. But the 453 00:21:02,383 --> 00:21:06,842 Speaker 1: specific unique experiences that Singapore offers still keeps it in 454 00:21:06,853 --> 00:21:09,561 Speaker 1: the sort of the planning horizon of tourists even though 455 00:21:09,571 --> 00:21:12,483 Speaker 1: Singapore is considered expensive. So it's both value but also 456 00:21:12,493 --> 00:21:14,713 Speaker 1: the quality of things that are being offered. 457 00:21:14,723 --> 00:21:15,302 Speaker 2: Yeah, that's right. And 458 00:21:15,311 --> 00:21:17,022 Speaker 2: also I think a lot of people see it as 459 00:21:17,032 --> 00:21:18,912 Speaker 2: a place to start, let's say if you're coming in 460 00:21:18,922 --> 00:21:21,071 Speaker 2: from Europe or the US, a great place to start 461 00:21:21,083 --> 00:21:22,983 Speaker 2: or maybe finish your holiday or maybe a little bit 462 00:21:22,993 --> 00:21:25,042 Speaker 2: of both at each end where you've done the long 463 00:21:25,052 --> 00:21:27,442 Speaker 2: haul flight into Singapore, then you might do a shorter 464 00:21:27,453 --> 00:21:28,003 Speaker 2: haul flight, 465 00:21:28,104 --> 00:21:31,093 Speaker 2: the destination you were looking for around the region and 466 00:21:31,104 --> 00:21:33,033 Speaker 2: then you see where you go from there that I 467 00:21:33,042 --> 00:21:35,843 Speaker 2: think is the the way round that people I think would, 468 00:21:35,854 --> 00:21:39,763 Speaker 2: would think about it, especially you've got the attractions, for example, 469 00:21:39,773 --> 00:21:42,854 Speaker 2: the night safari, that's quite a unique sort of proposition. 470 00:21:42,894 --> 00:21:46,323 Speaker 2: The Universal Studios, there's plenty of these sort of experiences 471 00:21:46,333 --> 00:21:48,374 Speaker 2: and just going around the Marina Bay area as well. 472 00:21:48,384 --> 00:21:50,683 Speaker 2: And of course, during the Taylor Swift Concert period, no 473 00:21:50,693 --> 00:21:53,723 Speaker 2: surprises the locations wise. 474 00:21:53,824 --> 00:21:55,905 Speaker 2: Of course, the Marina Bay area in particular. So the 475 00:21:55,915 --> 00:21:56,944 Speaker 2: biggest Swift 476 00:21:56,954 --> 00:21:57,405 Speaker 2: lift. 477 00:21:57,415 --> 00:21:59,563 Speaker 1: So David, you may have touched upon this earlier, but 478 00:21:59,574 --> 00:22:01,045 Speaker 1: I just want to be a little more granular. So 479 00:22:01,055 --> 00:22:03,214 Speaker 1: we are talking about two things. One is number of 480 00:22:03,224 --> 00:22:06,204 Speaker 1: tourists moving around the region and second is sort of 481 00:22:06,214 --> 00:22:09,304 Speaker 1: the per capita spend the spending more or less. So 482 00:22:09,314 --> 00:22:12,795 Speaker 1: just round it up for us both in those two metrics. Yeah. 483 00:22:12,805 --> 00:22:17,444 Speaker 2: So let's say we're thinking about firstly, passenger volumes, most 484 00:22:17,454 --> 00:22:19,444 Speaker 2: places have not fully 485 00:22:19,949 --> 00:22:22,359 Speaker 2: broken even on where they were in 2019. I think 486 00:22:22,369 --> 00:22:23,719 Speaker 2: the only one off the top of my head that 487 00:22:23,729 --> 00:22:27,530 Speaker 2: has for sure was Japan around October, November of last year. 488 00:22:27,540 --> 00:22:32,969 Speaker 2: Passenger volumes exceeded certain corridors exceeded way more than 2019. 489 00:22:32,979 --> 00:22:36,109 Speaker 2: Didn't just break even a great example, say being Singapore. 490 00:22:36,219 --> 00:22:39,089 Speaker 2: So as a destination, Japan has really been the most 491 00:22:39,099 --> 00:22:42,479 Speaker 2: popular choice and we've seen that clearly when you look 492 00:22:42,489 --> 00:22:45,140 Speaker 2: across anyone in the travel industry, they would not see 493 00:22:45,150 --> 00:22:49,369 Speaker 2: that as a remotely uh say controversial idea. Um The 494 00:22:49,739 --> 00:22:53,689 Speaker 2: issue with say uh Thailand has been that total passenger 495 00:22:53,699 --> 00:22:56,780 Speaker 2: volume arrivals, numbers um have been a bit more uh 496 00:22:56,790 --> 00:23:00,239 Speaker 2: a bit softer and than they were in 2019. Even today, 497 00:23:00,270 --> 00:23:03,400 Speaker 2: there is still the upside on the way that will come. 498 00:23:03,410 --> 00:23:06,229 Speaker 2: We think from the next leg up in China's outbound 499 00:23:06,239 --> 00:23:10,180 Speaker 2: tourist story. It's interesting when China first opened up about 500 00:23:10,189 --> 00:23:13,099 Speaker 2: a year ago, we saw an ongoing surge up to 501 00:23:13,109 --> 00:23:16,438 Speaker 2: about 50% of prepa levels for international travel 502 00:23:16,689 --> 00:23:18,899 Speaker 2: and then it stalled uh from around July all the 503 00:23:18,910 --> 00:23:20,949 Speaker 2: way through to late last year. And then it had 504 00:23:20,959 --> 00:23:24,000 Speaker 2: another jump higher and we're now around 83% now, maybe 505 00:23:24,010 --> 00:23:26,489 Speaker 2: it stays around there and then has one more leg up. 506 00:23:26,530 --> 00:23:28,569 Speaker 2: I don't know exactly when, but we think we'll be 507 00:23:28,579 --> 00:23:30,180 Speaker 2: seeing that by the end of the year. So that 508 00:23:30,189 --> 00:23:32,979 Speaker 2: should mean in general, the passenger volumes are all have 509 00:23:32,989 --> 00:23:36,869 Speaker 2: been quite successful in their comeback. Uh Now for say, 510 00:23:36,880 --> 00:23:40,579 Speaker 2: Thailand visitors from the ASEAN that's already been doing very, 511 00:23:40,589 --> 00:23:42,199 Speaker 2: very well. Visitors from India 512 00:23:42,300 --> 00:23:46,550 Speaker 2: has also been doing well and actually the cross border flows, 513 00:23:46,560 --> 00:23:48,520 Speaker 2: I guess it's no surprise. Once you start adding in 514 00:23:48,530 --> 00:23:51,420 Speaker 2: direct flights, you get a lot more visitors from that location. 515 00:23:51,530 --> 00:23:53,649 Speaker 2: The best example of this, which we did feature in 516 00:23:53,660 --> 00:23:57,030 Speaker 2: the report actually was India into Vietnam when we saw 517 00:23:57,040 --> 00:24:01,099 Speaker 2: those volumes surging. I think it's 2.5 times the amount 518 00:24:01,109 --> 00:24:05,160 Speaker 2: of visitors. But actually even India, in terms of the 519 00:24:05,170 --> 00:24:07,800 Speaker 2: strength of consumers and the sort of diaspora 520 00:24:07,910 --> 00:24:12,649 Speaker 2: around the world too, actually India into the US was 59% 521 00:24:12,660 --> 00:24:14,930 Speaker 2: above where it had been pre pandemic and into Japan 522 00:24:14,939 --> 00:24:17,469 Speaker 2: was not too far off either. So again, you're seeing 523 00:24:17,479 --> 00:24:20,458 Speaker 2: those clear preferences where either it's the FX rate that's 524 00:24:20,469 --> 00:24:23,000 Speaker 2: really driving it though. Of course, Japan has many things 525 00:24:23,010 --> 00:24:25,869 Speaker 2: to offer beyond just while it's good value. And also 526 00:24:25,880 --> 00:24:28,609 Speaker 2: it is uh these extra corridors being added or indeed 527 00:24:28,619 --> 00:24:31,050 Speaker 2: getting rid of visa restrictions. So you can see all 528 00:24:31,060 --> 00:24:33,329 Speaker 2: of these moving parts making a very big difference. 529 00:24:33,709 --> 00:24:37,698 Speaker 1: So now um we know high interest rates in economies 530 00:24:37,709 --> 00:24:40,689 Speaker 1: that have a lot of leverage should, at least in theory, 531 00:24:40,699 --> 00:24:44,869 Speaker 1: have a negative impact on people's desire to consume. Uh 532 00:24:44,910 --> 00:24:46,930 Speaker 1: We haven't really seen that in the US. Despite a 533 00:24:46,939 --> 00:24:50,170 Speaker 1: historic rise in interest rates, retail sales have been pretty robust, 534 00:24:50,180 --> 00:24:51,760 Speaker 1: although I don't want to talk about us later on 535 00:24:51,770 --> 00:24:52,170 Speaker 1: with you 536 00:24:52,420 --> 00:24:54,619 Speaker 1: and then we see it in Hong Kong, for example, 537 00:24:54,630 --> 00:24:57,708 Speaker 1: high interest rates are really hurting consumption. Now, elsewhere in 538 00:24:57,719 --> 00:25:01,800 Speaker 1: Asia we've seen rates go up with the exception of Japan. Yeah. Well, 539 00:25:01,810 --> 00:25:04,560 Speaker 1: they have done a little so there's zero now. Yes, 540 00:25:05,089 --> 00:25:07,550 Speaker 1: the impact of high interest 541 00:25:07,689 --> 00:25:11,349 Speaker 1: rates on spending in Asia. Do you have any views 542 00:25:11,359 --> 00:25:11,419 Speaker 1: so 543 00:25:11,430 --> 00:25:11,900 Speaker 1: far? 544 00:25:12,189 --> 00:25:15,599 Speaker 2: Well, I think the there's no doubt that it does 545 00:25:15,609 --> 00:25:18,839 Speaker 2: weigh on consumers when you have higher interest rates. It 546 00:25:18,849 --> 00:25:20,979 Speaker 2: makes a big difference. I think the thing that's been 547 00:25:20,989 --> 00:25:22,739 Speaker 2: most interesting in, 548 00:25:23,310 --> 00:25:26,329 Speaker 2: well, in, in le le let's take a step back 549 00:25:26,339 --> 00:25:29,170 Speaker 2: and start with, say the story everywhere that we had 550 00:25:29,180 --> 00:25:31,589 Speaker 2: before we then had the reopening. And we know in 551 00:25:31,599 --> 00:25:34,010 Speaker 2: Asia we opened a bit later during that period where 552 00:25:34,020 --> 00:25:36,390 Speaker 2: you are effectively more restricted on what you can do. 553 00:25:36,500 --> 00:25:40,449 Speaker 2: And especially for consumers, especially middle or higher income, consumers 554 00:25:40,459 --> 00:25:40,989 Speaker 2: spend 555 00:25:41,439 --> 00:25:45,639 Speaker 2: a decent portion of their expenditure going on travel if 556 00:25:45,650 --> 00:25:47,579 Speaker 2: you weren't doing it for a few years and then 557 00:25:47,589 --> 00:25:50,199 Speaker 2: suddenly you have room to do it during that period 558 00:25:50,209 --> 00:25:54,560 Speaker 2: of effective extra savings, the excess savings that accumulate. That's 559 00:25:54,569 --> 00:25:59,300 Speaker 2: where I think we've seen the extra disorientating part of, well, 560 00:25:59,310 --> 00:26:02,530 Speaker 2: shouldn't there be already much more of a response from 561 00:26:02,540 --> 00:26:05,560 Speaker 2: higher interest rates on consumer spending? I think the US 562 00:26:05,569 --> 00:26:06,209 Speaker 2: is a great 563 00:26:06,599 --> 00:26:10,198 Speaker 2: where that really did play out. We had $2.5 trillion 564 00:26:10,209 --> 00:26:13,550 Speaker 2: of excess savings accumulate by 2021. And it has been 565 00:26:13,560 --> 00:26:16,239 Speaker 2: in the process of being used up. Obviously, there's debates 566 00:26:16,250 --> 00:26:18,489 Speaker 2: out there of exactly how much is still left and 567 00:26:18,500 --> 00:26:21,099 Speaker 2: to what degree it even accrues any more to anyone 568 00:26:21,109 --> 00:26:23,239 Speaker 2: other than the higher income groups. And we know that 569 00:26:23,489 --> 00:26:26,390 Speaker 2: always and everywhere we look at this data, it always 570 00:26:26,400 --> 00:26:29,369 Speaker 2: usually is the higher income consumers that did accumulate more 571 00:26:29,380 --> 00:26:31,099 Speaker 2: of those excess savings. 572 00:26:31,469 --> 00:26:34,180 Speaker 2: I think some of that buffer is there in some economies. 573 00:26:34,260 --> 00:26:36,530 Speaker 2: But that only really I would say in emerging markets 574 00:26:36,540 --> 00:26:39,839 Speaker 2: probably applies to again, the higher income consumer groups, I 575 00:26:39,849 --> 00:26:43,780 Speaker 2: think middle, lower income, it's not as obvious, but the 576 00:26:43,790 --> 00:26:45,989 Speaker 2: other thing separate to excess savings. There has been a 577 00:26:46,000 --> 00:26:49,099 Speaker 2: buffer which is not something we're used to. Economists usually 578 00:26:49,109 --> 00:26:50,849 Speaker 2: don't pay attention to savings. Like 579 00:26:50,925 --> 00:26:55,015 Speaker 2: historically, it's a very boring thing, but it became very important. 580 00:26:55,025 --> 00:26:57,204 Speaker 2: I think during this uh pandemic period. But the other 581 00:26:57,214 --> 00:26:59,864 Speaker 2: one has been the labor markets in general. We've seen 582 00:26:59,875 --> 00:27:03,145 Speaker 2: relatively tight labor markets. There was the surge in demand, 583 00:27:03,155 --> 00:27:06,385 Speaker 2: people couldn't find enough workers, there was a relative lack 584 00:27:06,395 --> 00:27:09,344 Speaker 2: of migration flows. And actually this brings me on to 585 00:27:09,354 --> 00:27:10,295 Speaker 2: the point that 586 00:27:10,709 --> 00:27:13,689 Speaker 2: when we think about all the variables. Since the pandemic, 587 00:27:13,750 --> 00:27:16,520 Speaker 2: everything has really been fitting very nicely with the metaphor 588 00:27:16,530 --> 00:27:18,640 Speaker 2: of the bungee jump in my view. And what I 589 00:27:18,650 --> 00:27:20,589 Speaker 2: mean by that is we had to jump off the bridge, 590 00:27:20,599 --> 00:27:23,250 Speaker 2: the collapse in activity, the f the, the, the, the 591 00:27:23,260 --> 00:27:28,030 Speaker 2: worst uh global economy growth rates in 75 years, then 592 00:27:28,040 --> 00:27:30,459 Speaker 2: we knew we would rebound. That's the equivalent of jumping 593 00:27:30,469 --> 00:27:32,329 Speaker 2: off the bridge and the first bounce, you know what's 594 00:27:32,339 --> 00:27:35,339 Speaker 2: going on then that's the predictable part, getting direction, right 595 00:27:35,349 --> 00:27:37,750 Speaker 2: is fine. But after that, anyone say he's done a 596 00:27:37,760 --> 00:27:38,489 Speaker 2: bungee jump 597 00:27:38,939 --> 00:27:43,390 Speaker 2: myself, not included, would actually say they lose all orientation 598 00:27:43,400 --> 00:27:44,920 Speaker 2: of even where the ground of the sky is, they've 599 00:27:44,930 --> 00:27:48,380 Speaker 2: lost track. And because we've had such dramatic swings in 600 00:27:48,390 --> 00:27:50,829 Speaker 2: so many variables all at the same time, it's been 601 00:27:50,839 --> 00:27:54,469 Speaker 2: much harder to really definitively say, well, therefore this must 602 00:27:54,479 --> 00:27:58,160 Speaker 2: come eventually, it will eventually the bungee finishes and you 603 00:27:58,170 --> 00:28:00,159 Speaker 2: settle down. I think that will be the story of 604 00:28:00,170 --> 00:28:03,180 Speaker 2: next year where we're settling into the new, the way 605 00:28:03,189 --> 00:28:03,629 Speaker 2: it is 606 00:28:03,734 --> 00:28:05,916 Speaker 2: the last few years have not been normal in that way, 607 00:28:05,926 --> 00:28:09,586 Speaker 2: high excess savings, ultra tight labor markets in some locations 608 00:28:09,595 --> 00:28:13,196 Speaker 2: around the world. Major swings in migration flows to make 609 00:28:13,205 --> 00:28:15,995 Speaker 2: up for the pent up migration demand that was just 610 00:28:16,005 --> 00:28:18,825 Speaker 2: not able to be met in previous years, huge swings 611 00:28:18,836 --> 00:28:21,994 Speaker 2: in inflation and interest rates in again, the jobs market, 612 00:28:22,296 --> 00:28:25,505 Speaker 2: almost any variable. We look at has had these wild 613 00:28:25,515 --> 00:28:28,406 Speaker 2: swings that we're finally setting settling down into. 614 00:28:28,842 --> 00:28:30,692 Speaker 2: So I think the final piece of this will be 615 00:28:30,702 --> 00:28:33,121 Speaker 2: on the labor market front. If we start to see 616 00:28:33,131 --> 00:28:36,612 Speaker 2: that softening a lot more than that combined with the 617 00:28:36,621 --> 00:28:38,962 Speaker 2: cost of living challenges that are clearly there that are 618 00:28:38,972 --> 00:28:42,411 Speaker 2: impacting consumers and also more time going by where if 619 00:28:42,421 --> 00:28:44,712 Speaker 2: there were an excess savings story to be used up, 620 00:28:44,722 --> 00:28:47,052 Speaker 2: it would have happened by now. Then I think we 621 00:28:47,062 --> 00:28:49,182 Speaker 2: come exactly back to your point where there will be 622 00:28:49,192 --> 00:28:52,432 Speaker 2: more challenges but doesn't mean we have to have a recession. 623 00:28:52,442 --> 00:28:53,192 Speaker 2: I would say no, 624 00:28:53,569 --> 00:28:56,310 Speaker 2: the main reason being we didn't really have a boom. 625 00:28:56,319 --> 00:28:58,609 Speaker 2: So why should we have a bust? We were shut down, 626 00:28:58,619 --> 00:29:03,170 Speaker 2: we reopened. That's a base effects story. That's a disorientating feeling, 627 00:29:03,180 --> 00:29:05,849 Speaker 2: but that's not the same as a regular economic boom 628 00:29:05,859 --> 00:29:07,319 Speaker 2: that should therefore end in, in a 629 00:29:07,449 --> 00:29:10,489 Speaker 1: bus, not at all. Let me expand on that issue 630 00:29:10,500 --> 00:29:13,280 Speaker 1: a little bit, David. So you touched upon some of 631 00:29:13,290 --> 00:29:16,770 Speaker 1: these travel and tourism numbers being more relevant in the 632 00:29:16,780 --> 00:29:19,599 Speaker 1: context of middle and upper income uh part of the 633 00:29:19,609 --> 00:29:20,310 Speaker 1: population 634 00:29:20,849 --> 00:29:23,719 Speaker 1: with your data. Can you get a sense of this 635 00:29:23,729 --> 00:29:26,260 Speaker 1: um uh sort of the cost of living issue, how 636 00:29:26,270 --> 00:29:29,729 Speaker 1: it's affecting spending pattern among the lower income groups? 637 00:29:30,239 --> 00:29:32,569 Speaker 2: So you, I mean, you can depending on the market, 638 00:29:32,579 --> 00:29:35,910 Speaker 2: depending on say card penetration in different markets. Uh I mean, 639 00:29:35,920 --> 00:29:38,170 Speaker 2: certainly we're we, we, we know that there is a 640 00:29:38,180 --> 00:29:41,069 Speaker 2: growing amount of use of say digital wallets. Uh We're 641 00:29:41,079 --> 00:29:43,109 Speaker 2: seeing a lot more use of say account to account 642 00:29:43,119 --> 00:29:45,979 Speaker 2: the ach payments, uh where say in Singapore, that would 643 00:29:45,989 --> 00:29:47,949 Speaker 2: be the pay. Now for those who are based in 644 00:29:47,959 --> 00:29:50,170 Speaker 2: Singapore prompt pay in the case of Thailand. 645 00:29:50,385 --> 00:29:53,984 Speaker 2: And actually, uh mastercard is involved in the operations of around, 646 00:29:53,994 --> 00:29:56,555 Speaker 2: in around 13 different countries around the world of these 647 00:29:56,564 --> 00:30:00,185 Speaker 2: sort of real time payments, uh type systems. And the, 648 00:30:00,375 --> 00:30:02,484 Speaker 2: and that is certainly one that can be used a 649 00:30:02,494 --> 00:30:06,645 Speaker 2: lot more, I would say by a broader swathes of society, 650 00:30:06,655 --> 00:30:08,895 Speaker 2: it does a lot more of, of bringing even more 651 00:30:08,905 --> 00:30:10,444 Speaker 2: people into the system. 652 00:30:10,719 --> 00:30:13,280 Speaker 2: Um But it's still, it's a little harder for us 653 00:30:13,290 --> 00:30:16,790 Speaker 2: to be able to, to draw, I would say full 654 00:30:16,800 --> 00:30:20,229 Speaker 2: analogies of exactly what's going on, say across all of, say, 655 00:30:20,239 --> 00:30:23,719 Speaker 2: Indonesia or all of say, India when you get such 656 00:30:23,729 --> 00:30:26,550 Speaker 2: huge differences between, say what's going on anyway and say 657 00:30:26,560 --> 00:30:28,540 Speaker 2: the cities, the tier one cities or 658 00:30:28,650 --> 00:30:30,699 Speaker 2: the way through down into the more remote parts of 659 00:30:30,709 --> 00:30:33,109 Speaker 2: the country. So that one is a little bit more tricky. 660 00:30:33,150 --> 00:30:35,680 Speaker 2: Uh But certainly if we're talking about the major metropolitan 661 00:30:35,689 --> 00:30:39,369 Speaker 2: areas in most places and certainly, um, anyone who is 662 00:30:39,380 --> 00:30:42,060 Speaker 2: doing any kind of say, travel in particular, that's where 663 00:30:42,069 --> 00:30:44,770 Speaker 2: I think we really, uh we, we would, we would 664 00:30:44,780 --> 00:30:45,810 Speaker 2: be able to see a lot more, 665 00:30:45,900 --> 00:30:46,329 Speaker 1: right. 666 00:30:46,880 --> 00:30:49,900 Speaker 1: Um we have talked about China a bit earlier. Let's 667 00:30:49,910 --> 00:30:52,579 Speaker 1: talk a little more. First of all, why were the 668 00:30:52,589 --> 00:30:55,910 Speaker 1: Chinese so resistant to getting like a Mastercard or Visa 669 00:30:55,920 --> 00:30:58,550 Speaker 1: interface in their payment system for all these years? And 670 00:30:58,560 --> 00:31:00,750 Speaker 1: how come they capitulated all of a sudden? And now 671 00:31:00,760 --> 00:31:03,680 Speaker 1: we're seeing rapid acceptance, which is good news for mastercard. 672 00:31:03,689 --> 00:31:05,839 Speaker 1: But what's your sense behind the political economy of all 673 00:31:05,849 --> 00:31:06,250 Speaker 1: this 674 00:31:06,319 --> 00:31:08,880 Speaker 2: that I'm not so sure on what the exact story 675 00:31:08,890 --> 00:31:11,819 Speaker 2: actually is in any way. I think the one thing 676 00:31:11,829 --> 00:31:14,180 Speaker 2: I would say that looks quite clear at this point 677 00:31:14,310 --> 00:31:14,949 Speaker 2: is actually 678 00:31:15,046 --> 00:31:17,076 Speaker 2: that one, if you want to have a lot more 679 00:31:17,086 --> 00:31:19,566 Speaker 2: of those inbound tourists and travelers, then you do need 680 00:31:19,576 --> 00:31:23,145 Speaker 2: to provide a system and have a lot more choices 681 00:31:23,156 --> 00:31:26,755 Speaker 2: being made available to consumers, at least for the international 682 00:31:26,765 --> 00:31:30,745 Speaker 2: inbound travelers as well as for the domestic consumers as well. 683 00:31:30,755 --> 00:31:33,865 Speaker 2: So adding in an extra network in that way to 684 00:31:33,875 --> 00:31:36,985 Speaker 2: enable that extra competition where the banks can play an 685 00:31:36,995 --> 00:31:40,666 Speaker 2: even bigger role versus the existing wallets that were there 686 00:31:40,676 --> 00:31:43,095 Speaker 2: that had become so dominant. I think there was 687 00:31:43,212 --> 00:31:45,842 Speaker 2: my, my my sense and this is just my sense 688 00:31:45,852 --> 00:31:49,312 Speaker 2: is that it was more about seeing or wanting to 689 00:31:49,322 --> 00:31:52,612 Speaker 2: have more competition, wanting to actually broaden out the choices 690 00:31:52,621 --> 00:31:55,462 Speaker 2: for consumers and go beyond the two big players that 691 00:31:55,472 --> 00:31:58,432 Speaker 2: really had created effectively this super app, which is funny 692 00:31:58,442 --> 00:32:00,802 Speaker 2: because most places around the world want to build this 693 00:32:00,812 --> 00:32:02,891 Speaker 2: super app. But actually in the case of China, they've 694 00:32:02,901 --> 00:32:05,241 Speaker 2: had it where there's so many things and services you 695 00:32:05,251 --> 00:32:06,891 Speaker 2: can do from these 696 00:32:07,602 --> 00:32:09,121 Speaker 1: wechat for everything you 697 00:32:09,131 --> 00:32:11,261 Speaker 2: name it and that sort of thing. 698 00:32:11,589 --> 00:32:15,569 Speaker 2: Really. I think uh it's to diversify what the use 699 00:32:15,579 --> 00:32:18,449 Speaker 2: cases are to allow a lot more of the foreigners 700 00:32:18,459 --> 00:32:20,989 Speaker 2: coming in. If you want to have tourists, you make 701 00:32:21,000 --> 00:32:22,089 Speaker 2: it much easier for them 702 00:32:22,400 --> 00:32:25,760 Speaker 2: at the same time. Uh with the say the domestic 703 00:32:25,770 --> 00:32:29,030 Speaker 2: providers that are there uh adding a bit more competition. 704 00:32:29,060 --> 00:32:32,000 Speaker 2: Uh and it would probably be at the margins. I mean, again, 705 00:32:32,079 --> 00:32:36,380 Speaker 2: there's about a 20 years uh head start there. At least, 706 00:32:36,459 --> 00:32:39,560 Speaker 2: I think it is one where we we'll see, I 707 00:32:39,569 --> 00:32:42,000 Speaker 2: think a lot more of those choices being provided and 708 00:32:42,010 --> 00:32:44,199 Speaker 2: that probably I think is was a key driver of 709 00:32:44,209 --> 00:32:46,199 Speaker 2: why that was happening at this point. 710 00:32:46,569 --> 00:32:50,040 Speaker 1: So in parallel to those two large payment providers in 711 00:32:50,050 --> 00:32:53,530 Speaker 1: China and their payment rails around the world, as we've seen, 712 00:32:53,540 --> 00:32:57,550 Speaker 1: sort of e-commerce take hold, there are many alternative ecommerce 713 00:32:57,560 --> 00:32:59,229 Speaker 1: companies that have come up, right. I can think of 714 00:32:59,239 --> 00:33:02,390 Speaker 1: like paypal and others and revolut who are creating 715 00:33:03,520 --> 00:33:05,530 Speaker 1: sort of an alternative value proposition if you will, for 716 00:33:05,540 --> 00:33:07,380 Speaker 1: customers who want to have wallets who want to make 717 00:33:07,390 --> 00:33:10,969 Speaker 1: payments is mastercard embedded in these things or these are 718 00:33:10,979 --> 00:33:12,579 Speaker 1: parallel to mastercard entirely. 719 00:33:12,589 --> 00:33:14,979 Speaker 2: I think it depends which, which one we're talking about. 720 00:33:14,989 --> 00:33:17,719 Speaker 2: I think a great example of one where we're absolutely 721 00:33:17,729 --> 00:33:20,569 Speaker 2: involved is the, and I think this is the key 722 00:33:20,579 --> 00:33:22,780 Speaker 2: thing that as long as it's in an open loop 723 00:33:22,790 --> 00:33:25,339 Speaker 2: network where we can be one of the providers and 724 00:33:25,349 --> 00:33:27,069 Speaker 2: we're involved, that's what we're looking for is a sort 725 00:33:27,079 --> 00:33:30,420 Speaker 2: of ability to be taking part in the system and, and, and, 726 00:33:30,430 --> 00:33:31,780 Speaker 2: and really they 727 00:33:32,040 --> 00:33:35,209 Speaker 2: us the opportunity to leverage our network including globally in 728 00:33:35,219 --> 00:33:39,979 Speaker 2: more than 210 countries. That story. I think you mentioned 729 00:33:39,989 --> 00:33:43,040 Speaker 2: earlier on the sort of more old fashioned idea of 730 00:33:43,050 --> 00:33:47,579 Speaker 2: say the the installments, correct? What about prepaid cards? Sounds 731 00:33:47,589 --> 00:33:50,579 Speaker 2: like something you would think that sounds a bit old fashioned, 732 00:33:50,689 --> 00:33:54,209 Speaker 2: but actually, it's becoming very, very popular. And I think 733 00:33:54,219 --> 00:33:55,219 Speaker 2: a key reason for it 734 00:33:55,699 --> 00:33:58,630 Speaker 2: is that throwing some technology in there too, you have 735 00:33:58,640 --> 00:34:01,949 Speaker 2: your app, I think one good example say would be 736 00:34:01,959 --> 00:34:05,180 Speaker 2: Youtrip uh where even in say, Thailand, I was talking 737 00:34:05,189 --> 00:34:08,159 Speaker 2: to people where there it's, it's we're seeing a lot 738 00:34:08,169 --> 00:34:11,510 Speaker 2: more use of these different types of, of a technology 739 00:34:11,520 --> 00:34:13,879 Speaker 2: for an existing idea. It's not a brand new idea, 740 00:34:13,889 --> 00:34:16,189 Speaker 2: but redone in a, in a, in a, in a, 741 00:34:16,199 --> 00:34:18,909 Speaker 2: in a really modern way that makes the user experience, 742 00:34:19,639 --> 00:34:23,290 Speaker 2: you can have multiple currencies, all sitting on your wallet. Actually, 743 00:34:23,300 --> 00:34:27,340 Speaker 2: the regulator here actually just increased the total amount that 744 00:34:27,350 --> 00:34:30,659 Speaker 2: you can put into these wallets. Recognizing actually that it's 745 00:34:30,669 --> 00:34:33,530 Speaker 2: not just people who are purely on a budget that are, 746 00:34:33,540 --> 00:34:35,739 Speaker 2: you know, really, really need to be super tight. It's 747 00:34:35,750 --> 00:34:38,409 Speaker 2: also the really affluent consumers want to use it too 748 00:34:38,419 --> 00:34:39,969 Speaker 2: because they see it as a way of, ok, I'm 749 00:34:39,979 --> 00:34:42,120 Speaker 2: going to go to Japan. I love this exchange 750 00:34:42,219 --> 00:34:44,679 Speaker 2: right now. I'm gonna already buy my yen in advance. 751 00:34:44,689 --> 00:34:46,959 Speaker 2: I know what my exchange rate is. And then you 752 00:34:46,969 --> 00:34:48,709 Speaker 2: feel a little bit, you could argue, maybe it would 753 00:34:48,719 --> 00:34:51,479 Speaker 2: be a sense of extra security around it too, of 754 00:34:51,489 --> 00:34:55,120 Speaker 2: using something that's prepaid when you're traveling. And of course, 755 00:34:55,129 --> 00:34:58,689 Speaker 2: the acceptance points with the example of U Tripp is everywhere, 756 00:34:58,699 --> 00:34:59,229 Speaker 2: Mastercard 757 00:34:59,239 --> 00:35:03,479 Speaker 1: is accepted. I see, I see. Um and uh related 758 00:35:03,489 --> 00:35:05,320 Speaker 1: to payments is of course security. 759 00:35:05,729 --> 00:35:08,029 Speaker 1: I mean, not a day goes by that we don't 760 00:35:08,040 --> 00:35:12,219 Speaker 1: hear things about, you know, the ransomware and fishing and 761 00:35:12,429 --> 00:35:16,169 Speaker 1: uh scams and so on. I'm sure this is something 762 00:35:16,229 --> 00:35:18,699 Speaker 1: that mastercard has to worry about in a real time 763 00:35:19,209 --> 00:35:22,560 Speaker 1: second by second basis. So give us a sense of 764 00:35:22,570 --> 00:35:25,350 Speaker 1: your challenges and your solutions. 765 00:35:26,100 --> 00:35:28,899 Speaker 2: I would say that the, when we think about the 766 00:35:28,909 --> 00:35:32,360 Speaker 2: global business, the mascot has got the core payments division. 767 00:35:32,370 --> 00:35:35,759 Speaker 2: Of course, the what everyone assumes that's all there is. 768 00:35:35,770 --> 00:35:38,330 Speaker 2: And then you have services and the services part has 769 00:35:38,340 --> 00:35:42,080 Speaker 2: been the one that's been growing rapidly. And particularly of course, 770 00:35:42,090 --> 00:35:44,120 Speaker 2: the cyber and intelligence sort of group 771 00:35:44,219 --> 00:35:47,120 Speaker 2: to your point as we've seen this rise of digital 772 00:35:47,129 --> 00:35:49,969 Speaker 2: payments of e commerce, we also have been seeing the 773 00:35:49,979 --> 00:35:54,020 Speaker 2: rise in the security risks that go alongside that and 774 00:35:54,030 --> 00:35:57,159 Speaker 2: any way of particularly say, feeling more secure when making 775 00:35:57,169 --> 00:35:59,729 Speaker 2: those payments, of course, that's the key thing that we've 776 00:35:59,739 --> 00:36:02,189 Speaker 2: really been focusing on in a very big way. 777 00:36:02,739 --> 00:36:04,879 Speaker 2: So a great example of this was say, click to 778 00:36:04,889 --> 00:36:08,070 Speaker 2: pay that was launched not that long ago or tokenisation. 779 00:36:08,169 --> 00:36:11,620 Speaker 2: So imagine something where you're much more secure online because 780 00:36:11,629 --> 00:36:13,770 Speaker 2: let's say uh in the past, you would have say 781 00:36:13,780 --> 00:36:16,770 Speaker 2: left a card on file with a merchant instead of 782 00:36:16,780 --> 00:36:19,600 Speaker 2: leaving your actual card details with them. Think of it 783 00:36:19,610 --> 00:36:22,439 Speaker 2: instead as you can just leave a token with them 784 00:36:22,929 --> 00:36:26,279 Speaker 2: where even if that is somehow intercepted or taken at 785 00:36:26,290 --> 00:36:29,149 Speaker 2: some point later, it only works with that merchant anyway, 786 00:36:29,159 --> 00:36:32,549 Speaker 2: it's worthless to anyone else. And so coming up with 787 00:36:32,560 --> 00:36:36,689 Speaker 2: more of those uh solutions for tokenization for confirming a 788 00:36:36,699 --> 00:36:40,399 Speaker 2: digital identity, in particular, the combination of all types of 789 00:36:40,409 --> 00:36:43,029 Speaker 2: things that we see are coming through. That's something that 790 00:36:43,040 --> 00:36:44,929 Speaker 2: Mastercard has been doing a huge amount of work on 791 00:36:44,939 --> 00:36:45,590 Speaker 2: this whole, 792 00:36:45,715 --> 00:36:48,334 Speaker 2: teams of people that are very, very focused on that 793 00:36:48,344 --> 00:36:53,074 Speaker 2: on the spotting fraud, particularly in e commerce using all 794 00:36:53,084 --> 00:36:55,734 Speaker 2: types of machine learning or A I, you name it. 795 00:36:55,925 --> 00:36:58,854 Speaker 2: That is a very, very big part. On the security side, 796 00:36:59,024 --> 00:37:01,155 Speaker 2: the other parts though on the services division that I 797 00:37:01,165 --> 00:37:04,814 Speaker 2: hadn't realized even myself until joining that are so dominant 798 00:37:04,824 --> 00:37:07,614 Speaker 2: are on the marketing services to be able to help 799 00:37:08,770 --> 00:37:11,759 Speaker 2: a retailer add more customers or it could be any 800 00:37:11,770 --> 00:37:13,750 Speaker 2: type of entity. Actually, it could be an F I 801 00:37:13,760 --> 00:37:18,339 Speaker 2: as well or indeed the loyalty programs where we run 802 00:37:18,429 --> 00:37:21,060 Speaker 2: billions of points around the world and making those sort 803 00:37:21,070 --> 00:37:23,770 Speaker 2: of much more seamless and really get used and drive 804 00:37:23,780 --> 00:37:26,739 Speaker 2: a lot more of the loyalty of consumers knowing that 805 00:37:26,750 --> 00:37:29,790 Speaker 2: also that since the pandemic, we have been seeing an 806 00:37:29,800 --> 00:37:30,459 Speaker 2: increase in 807 00:37:30,540 --> 00:37:33,699 Speaker 2: the in many markets, Australia is a good example where 808 00:37:33,709 --> 00:37:36,360 Speaker 2: we looked at this recently of the share of all 809 00:37:36,370 --> 00:37:38,399 Speaker 2: the cards outstanding that are shopping at more than a 810 00:37:38,409 --> 00:37:41,860 Speaker 2: set number of merchants, let's say 20 or 30 that 811 00:37:41,870 --> 00:37:45,089 Speaker 2: share has been going up since 2019. Now part of 812 00:37:45,100 --> 00:37:47,270 Speaker 2: it could be, well, there's just more say maybe ecommerce 813 00:37:47,280 --> 00:37:50,189 Speaker 2: providers out there. But part of it also is people 814 00:37:50,199 --> 00:37:52,239 Speaker 2: are changing their spending habits because 815 00:37:52,780 --> 00:37:56,029 Speaker 2: in some places, we have hybrid work. So instead of 816 00:37:56,040 --> 00:37:59,500 Speaker 2: everyone coming in the same routine every day, Monday to Friday, 817 00:37:59,590 --> 00:38:01,638 Speaker 2: if they have a bit more variety in that, there's 818 00:38:01,649 --> 00:38:04,449 Speaker 2: also a variety of where people are even living working 819 00:38:04,459 --> 00:38:06,629 Speaker 2: and spending depending on which part of the world we're 820 00:38:06,639 --> 00:38:08,360 Speaker 2: talking about. I think it was much more of an 821 00:38:08,370 --> 00:38:11,100 Speaker 2: obvious story that was much stronger in say London or 822 00:38:11,110 --> 00:38:14,610 Speaker 2: New York or even Melbourne Sydney than say was the 823 00:38:14,620 --> 00:38:16,979 Speaker 2: case here in Singapore. But we even see evidence of 824 00:38:16,989 --> 00:38:17,889 Speaker 2: it say in Hong Kong. 825 00:38:19,300 --> 00:38:22,350 Speaker 2: So that, that's another, if I sort of run through 826 00:38:22,360 --> 00:38:25,030 Speaker 2: the list of the different services that, that, that, that 827 00:38:25,050 --> 00:38:29,379 Speaker 2: services division, let's say really counts uh included in its business. 828 00:38:29,449 --> 00:38:32,909 Speaker 2: Definitely the, the, the, the security and the cyber cyber 829 00:38:32,919 --> 00:38:34,949 Speaker 2: security is, is, is very high up on the list. Uh, 830 00:38:35,010 --> 00:38:39,000 Speaker 2: loyalty marketing. The other ones are interesting in that there is, 831 00:38:39,010 --> 00:38:42,340 Speaker 2: uh we bought yield last year, a personalization service to 832 00:38:42,350 --> 00:38:43,919 Speaker 2: be able to try and help 833 00:38:44,085 --> 00:38:46,476 Speaker 2: a lot of folks trying to get a lot more 834 00:38:46,486 --> 00:38:49,105 Speaker 2: of the right sort of offers and, and uh and 835 00:38:49,114 --> 00:38:52,736 Speaker 2: show the right things to consumers and do it in a, 836 00:38:52,746 --> 00:38:55,166 Speaker 2: in a real time testing environment and then separate to 837 00:38:55,176 --> 00:38:57,565 Speaker 2: that is a test and learn where they do experimentation 838 00:38:57,575 --> 00:39:00,625 Speaker 2: for businesses which you can run regularly to be able to, 839 00:39:00,635 --> 00:39:02,625 Speaker 2: even if it's just to get a little bit more 840 00:39:02,635 --> 00:39:05,864 Speaker 2: of uh enhance your business because maybe you're changing what 841 00:39:05,875 --> 00:39:08,344 Speaker 2: you change your prices on even to try and do 842 00:39:08,355 --> 00:39:09,345 Speaker 2: it with a scientific 843 00:39:09,791 --> 00:39:13,051 Speaker 2: evidence based work on the back of that to test 844 00:39:13,062 --> 00:39:15,872 Speaker 2: A B testing in that way. That's another offering that's 845 00:39:15,882 --> 00:39:17,812 Speaker 2: been going down very well worldwide. Actually, 846 00:39:18,031 --> 00:39:18,362 Speaker 1: that's 847 00:39:18,372 --> 00:39:21,352 Speaker 1: absolutely fascinating. One more facet around that is of course, 848 00:39:21,362 --> 00:39:25,440 Speaker 1: data privacy. You obviously hold a huge amount of sensitive 849 00:39:25,451 --> 00:39:29,592 Speaker 1: financial data of consumers all around the world and starting 850 00:39:29,602 --> 00:39:31,852 Speaker 1: with the EU but becoming a broader trend is this 851 00:39:31,862 --> 00:39:34,770 Speaker 1: issue of data privacy that you know, countries are asking 852 00:39:35,300 --> 00:39:39,510 Speaker 1: companies like yours to have servers, domestically localized servers can 853 00:39:39,520 --> 00:39:42,000 Speaker 1: share the data across jurisdiction and so on. But I 854 00:39:42,010 --> 00:39:43,649 Speaker 1: would think that this is a particular challenge for a 855 00:39:43,659 --> 00:39:46,299 Speaker 1: company like mastercard, which is truly global in nature. I 856 00:39:46,310 --> 00:39:48,699 Speaker 1: can have a Mastercard issued in Singapore, but I want 857 00:39:48,709 --> 00:39:50,799 Speaker 1: to use it all over the world. But if Singapore 858 00:39:50,810 --> 00:39:53,699 Speaker 1: demands all the data to be stored in Singapore, can 859 00:39:53,709 --> 00:39:56,860 Speaker 1: you run risk analytics of my expenditure pattern across the 860 00:39:56,870 --> 00:39:58,239 Speaker 1: border or do you have to like 861 00:39:58,669 --> 00:40:01,000 Speaker 1: bring the data back to Singapore all the time? And 862 00:40:01,010 --> 00:40:03,129 Speaker 1: does it then add extra costs of doing business? 863 00:40:03,139 --> 00:40:03,770 Speaker 2: Well, it 864 00:40:03,780 --> 00:40:06,459 Speaker 2: probably is the sort of thing where you know each 865 00:40:06,469 --> 00:40:09,409 Speaker 2: location has their own regulation and of course, that's the 866 00:40:09,419 --> 00:40:12,949 Speaker 2: regulation that we follow very well. And in some cases, 867 00:40:12,959 --> 00:40:16,459 Speaker 2: it does add extra layers to the process, of course. 868 00:40:16,590 --> 00:40:18,629 Speaker 2: But the key thing I would stress is that even 869 00:40:18,639 --> 00:40:20,550 Speaker 2: with say what, what you know, what we would be 870 00:40:20,560 --> 00:40:24,219 Speaker 2: working with, it's all been already through the system 871 00:40:24,695 --> 00:40:30,264 Speaker 2: privacy filtered, we already it's aggregated and anonymized versions of everything. 872 00:40:30,455 --> 00:40:32,804 Speaker 2: And I think so on that front, in terms of 873 00:40:32,814 --> 00:40:35,425 Speaker 2: what the policies are, I think I've been really impressed 874 00:40:35,435 --> 00:40:38,714 Speaker 2: actually with just how much time and attention and care 875 00:40:38,725 --> 00:40:43,574 Speaker 2: is really paid onto those sort of areas. But yes, 876 00:40:43,655 --> 00:40:47,044 Speaker 2: of course, if there's a different regulation that newly comes in, 877 00:40:47,054 --> 00:40:49,415 Speaker 2: then you've got to of course change what you do 878 00:40:49,425 --> 00:40:50,635 Speaker 2: on the back of that. Right. 879 00:40:50,889 --> 00:40:54,600 Speaker 1: Um But in terms of policymakers around the world, being 880 00:40:54,610 --> 00:40:58,580 Speaker 1: in support of innovation in digital payments settlement and so on. 881 00:40:58,750 --> 00:41:01,310 Speaker 1: What's your sense that 10 years ago, it was a 882 00:41:01,320 --> 00:41:03,790 Speaker 1: bit of a wild west and now it's kind of 883 00:41:03,800 --> 00:41:06,830 Speaker 1: a level playing field between banks, non banks and other 884 00:41:06,840 --> 00:41:09,060 Speaker 1: start ups, or do you still feel that there's a 885 00:41:09,070 --> 00:41:10,850 Speaker 1: lot of arbitrage going on in the system? 886 00:41:11,300 --> 00:41:15,009 Speaker 2: Um Well, I think the probably the most interesting stories 887 00:41:15,020 --> 00:41:18,020 Speaker 2: that we see everywhere around the world probably would, would 888 00:41:18,030 --> 00:41:18,949 Speaker 2: come into 889 00:41:19,370 --> 00:41:24,129 Speaker 2: uh seeing a lot of innovation taking place maybe inside 890 00:41:24,139 --> 00:41:26,060 Speaker 2: but a lot of the times also outside say the 891 00:41:26,070 --> 00:41:28,659 Speaker 2: regular banks, but then the banks seeing, ok, this is 892 00:41:28,669 --> 00:41:31,449 Speaker 2: a good use case we can adopt that too. And 893 00:41:31,459 --> 00:41:33,540 Speaker 2: then there's competition that comes in and then some of 894 00:41:33,550 --> 00:41:36,280 Speaker 2: the challenges that creep in can come from the fact 895 00:41:36,290 --> 00:41:38,750 Speaker 2: that actually for say a lot of the um the 896 00:41:38,760 --> 00:41:42,540 Speaker 2: the challenger, new entities, the new say digital banks or 897 00:41:42,550 --> 00:41:44,879 Speaker 2: any of the other groups that are trying to see 898 00:41:44,889 --> 00:41:47,560 Speaker 2: how they can play a role in in various, 899 00:41:48,639 --> 00:41:51,299 Speaker 2: of course, there is an advantage of being that those 900 00:41:51,310 --> 00:41:53,479 Speaker 2: bigger players, right? You have the lower cost of funding, 901 00:41:53,489 --> 00:41:56,350 Speaker 2: for example, that really can be a big advantage almost 902 00:41:56,360 --> 00:41:59,389 Speaker 2: anywhere I could think of. But I think that innovation 903 00:41:59,399 --> 00:42:02,100 Speaker 2: is not just happening outside. I think even a lot 904 00:42:02,110 --> 00:42:04,929 Speaker 2: of the banks are really paying serious attention because they're 905 00:42:04,939 --> 00:42:08,189 Speaker 2: seeing what's going on elsewhere. They're realizing that they need 906 00:42:08,199 --> 00:42:11,120 Speaker 2: to at least have say, let's take the average app 907 00:42:11,129 --> 00:42:14,189 Speaker 2: that people use when they are doing banking, they want 908 00:42:14,199 --> 00:42:16,110 Speaker 2: it to really work or when they want to make 909 00:42:16,120 --> 00:42:16,590 Speaker 2: a payment, 910 00:42:17,149 --> 00:42:20,969 Speaker 2: something that at least works every time for the extra authentication, 911 00:42:20,979 --> 00:42:23,270 Speaker 2: let's say in Singapore, you're making a payment, you go 912 00:42:23,280 --> 00:42:26,419 Speaker 2: to your banking app to authenticate that should be a 913 00:42:26,429 --> 00:42:29,409 Speaker 2: seamless enough process to try and find ways of making 914 00:42:29,419 --> 00:42:31,989 Speaker 2: it more efficient is really, I think something that all 915 00:42:32,000 --> 00:42:34,350 Speaker 2: the banks uh anywhere that I can think of, they 916 00:42:34,360 --> 00:42:37,370 Speaker 2: really are trying to do that as much as they can. 917 00:42:37,379 --> 00:42:39,739 Speaker 2: But of course, challenges come alongside that when you have 918 00:42:39,750 --> 00:42:40,649 Speaker 2: even more infrastructure 919 00:42:40,895 --> 00:42:44,344 Speaker 2: and legacy issues that can make it a little bit slower. 920 00:42:44,354 --> 00:42:47,145 Speaker 2: So there's, there are pros and cons depending on which 921 00:42:47,155 --> 00:42:48,975 Speaker 2: part of the ecosystem you're really sitting in, I would 922 00:42:48,985 --> 00:42:50,034 Speaker 2: say right, 923 00:42:50,155 --> 00:42:54,444 Speaker 1: right earlier, when we were talking about consumers around the world, 924 00:42:54,455 --> 00:42:58,264 Speaker 1: you touched upon us, consumers who got the biggest cash 925 00:42:58,274 --> 00:43:03,834 Speaker 1: bonanza possible in history during the 2020 21 pandemic response. 926 00:43:03,844 --> 00:43:04,185 Speaker 1: And 927 00:43:04,580 --> 00:43:07,939 Speaker 1: we've seen fairly profound impact of that in consumption patterns. 928 00:43:08,040 --> 00:43:10,949 Speaker 1: To your point, some of the savings has been worked off. 929 00:43:11,300 --> 00:43:14,060 Speaker 1: Um What's your sense in your data? What do you 930 00:43:14,070 --> 00:43:17,899 Speaker 1: see in terms of American consumer spending pattern and where 931 00:43:17,909 --> 00:43:20,678 Speaker 1: do they stand right now? What's the outlook of spending. 932 00:43:21,040 --> 00:43:24,100 Speaker 2: Yeah, it's, I mean, certainly we're, it's not as strong 933 00:43:24,110 --> 00:43:26,520 Speaker 2: as it was, but at the same time, we're also 934 00:43:26,530 --> 00:43:29,429 Speaker 2: not seeing any collapses. I think it's sort of settling 935 00:43:29,439 --> 00:43:32,889 Speaker 2: down in that way where you, where we're going back, 936 00:43:33,100 --> 00:43:36,750 Speaker 2: going towards a sort of sustainable pace of growth. And 937 00:43:36,760 --> 00:43:37,179 Speaker 2: I think 938 00:43:37,389 --> 00:43:40,610 Speaker 2: in, in that way to your point, the amount of, of, of, 939 00:43:40,620 --> 00:43:43,360 Speaker 2: you know, the kitchen sink and the kitchen being thrown 940 00:43:43,370 --> 00:43:47,129 Speaker 2: at fiscal policy stimulus across multiple advanced economies around the 941 00:43:47,139 --> 00:43:50,370 Speaker 2: world was this extra point about the bungee jump that 942 00:43:50,379 --> 00:43:53,779 Speaker 2: was so disorientating to have had the lagged impact of 943 00:43:53,790 --> 00:43:55,500 Speaker 2: having all this extra buffer. 944 00:43:56,679 --> 00:43:58,370 Speaker 2: I think the key part there will will come down 945 00:43:58,379 --> 00:44:00,820 Speaker 2: to the jobs market that so far it has been 946 00:44:00,830 --> 00:44:05,310 Speaker 2: showing very, very mild signs of softening but from ultra 947 00:44:05,320 --> 00:44:09,290 Speaker 2: tight to just still tight, it's still a good position 948 00:44:09,300 --> 00:44:12,219 Speaker 2: to be in. Uh I think the challenge uh will 949 00:44:12,229 --> 00:44:15,540 Speaker 2: will be over the next 12 months or so that 950 00:44:15,719 --> 00:44:18,090 Speaker 2: we if we don't see any rate cuts, 951 00:44:18,510 --> 00:44:21,330 Speaker 2: then of course, that adds to the extra financial pressures. 952 00:44:21,340 --> 00:44:23,330 Speaker 2: And it's interesting in the case of the US is 953 00:44:23,340 --> 00:44:25,529 Speaker 2: not as painful as it is say elsewhere on say 954 00:44:25,540 --> 00:44:28,010 Speaker 2: mortgage rates, right? It would be of course for someone 955 00:44:28,020 --> 00:44:30,060 Speaker 2: trying to take out a new mortgage where they have 956 00:44:30,070 --> 00:44:32,989 Speaker 2: to then take the prevailing interest rate that they could 957 00:44:33,000 --> 00:44:36,060 Speaker 2: lock in for 30 years. But actually all the existing 958 00:44:36,070 --> 00:44:36,810 Speaker 2: mortgage holders 959 00:44:36,895 --> 00:44:38,924 Speaker 2: be holding off. But that actually creates a bit of 960 00:44:38,935 --> 00:44:42,154 Speaker 2: an interesting challenge here because if you're not choosing to 961 00:44:42,165 --> 00:44:46,114 Speaker 2: move and there's therefore less supply less people selling as well, 962 00:44:46,125 --> 00:44:48,395 Speaker 2: you get some weird dynamics that creep in in the 963 00:44:48,405 --> 00:44:51,014 Speaker 2: market at that point. And then maybe people end up saying, well, 964 00:44:51,024 --> 00:44:53,155 Speaker 2: I have to rent or I'll just buy it whatever 965 00:44:53,294 --> 00:44:55,185 Speaker 2: that I can actually get. Um, 966 00:44:55,639 --> 00:44:57,580 Speaker 2: on the assumption that rates come down and they can 967 00:44:57,590 --> 00:45:00,580 Speaker 2: then refinance later in other places. Let's say most of 968 00:45:00,590 --> 00:45:03,489 Speaker 2: the rest of the world by now, we have pretty 969 00:45:03,500 --> 00:45:06,320 Speaker 2: much finished, not everyone, some people got say five year deals, 970 00:45:06,330 --> 00:45:10,149 Speaker 2: but most people have probably finished whatever fixed rate, low 971 00:45:10,159 --> 00:45:12,500 Speaker 2: fixed rate mortgage they might have taken out during the 972 00:45:12,510 --> 00:45:14,129 Speaker 2: sweet spot time a few years ago 973 00:45:14,370 --> 00:45:16,810 Speaker 2: and therefore they're at the higher rate. But I would 974 00:45:16,820 --> 00:45:18,949 Speaker 2: stress this is another point of the bungee jump here 975 00:45:18,959 --> 00:45:21,030 Speaker 2: once we do get those rate cuts and they've already 976 00:45:21,040 --> 00:45:23,839 Speaker 2: got going. We think, uh that they, they, they should 977 00:45:23,850 --> 00:45:26,239 Speaker 2: keep going in Europe. We think we'll get going in 978 00:45:26,250 --> 00:45:28,469 Speaker 2: the US by the end of the year. That should 979 00:45:28,479 --> 00:45:33,189 Speaker 2: mean that everyone benefits simultaneously as opposed to on the 980 00:45:33,199 --> 00:45:36,669 Speaker 2: way up when many mortgagees were, say 981 00:45:37,239 --> 00:45:39,860 Speaker 2: it's able to benefit from not feeling any of that. 982 00:45:40,070 --> 00:45:42,429 Speaker 2: And only eventually they started to feel it when you 983 00:45:42,439 --> 00:45:44,540 Speaker 2: get a rate cut, it should benefit all at the 984 00:45:44,550 --> 00:45:46,360 Speaker 2: same time. Of course, the flip side of that would 985 00:45:46,370 --> 00:45:50,340 Speaker 2: be true as well. If for whatever reason, in a scenario, 986 00:45:50,350 --> 00:45:52,989 Speaker 2: not our view at all that you get a hike, 987 00:45:53,000 --> 00:45:55,070 Speaker 2: then also the pain would be quite simultaneous. 988 00:45:55,100 --> 00:45:55,270 Speaker 1: Right. 989 00:45:55,280 --> 00:45:58,040 Speaker 1: So you are in the no recession camp. That's amply clear. 990 00:45:58,050 --> 00:45:58,330 Speaker 2: Yes. 991 00:45:58,790 --> 00:45:59,459 Speaker 2: Yes, we are 992 00:45:59,780 --> 00:46:04,919 Speaker 1: um, around the world. Um, there are jurisdictions where leverage 993 00:46:04,929 --> 00:46:08,439 Speaker 1: is higher than the American consumer leverage. American households and 994 00:46:08,449 --> 00:46:12,520 Speaker 1: corporations deleverage substantially in the aftermath of the global financial crisis. 995 00:46:12,530 --> 00:46:14,540 Speaker 1: So that could be another mitigating factor that the debt 996 00:46:14,550 --> 00:46:17,389 Speaker 1: service ratio is not particularly high. But then when I 997 00:46:17,399 --> 00:46:20,459 Speaker 1: think about European consumers or Korean consumers for that matter 998 00:46:20,469 --> 00:46:23,270 Speaker 1: or consumers in Hong Kong, it's a very different proposition. 999 00:46:23,510 --> 00:46:27,029 Speaker 1: So really that any insights on Korea or Europe, that 1000 00:46:27,040 --> 00:46:29,870 Speaker 1: their consumption seems to be a little more restrained than 1001 00:46:29,879 --> 00:46:30,239 Speaker 1: it is in the 1002 00:46:30,250 --> 00:46:30,760 Speaker 1: US. 1003 00:46:30,939 --> 00:46:33,889 Speaker 2: Yeah. Well, I think straight away that point as I 1004 00:46:33,899 --> 00:46:37,929 Speaker 2: mentioned that the US benefits from is exactly not the 1005 00:46:37,939 --> 00:46:43,090 Speaker 2: case in those locations. You mentioned Australia and New Zealand 1006 00:46:43,100 --> 00:46:47,370 Speaker 2: also have these relatively high levels also on leverage. And 1007 00:46:47,379 --> 00:46:50,000 Speaker 2: therefore the longer you have interest rates as high as 1008 00:46:50,010 --> 00:46:53,090 Speaker 2: they are even more of the prolonged 1009 00:46:53,300 --> 00:46:56,600 Speaker 2: say burden uh means that eventually you start to see 1010 00:46:56,610 --> 00:46:59,388 Speaker 2: a few more cracks coming through. But that's actually part 1011 00:46:59,399 --> 00:47:03,280 Speaker 2: of the whole uh policy objective here to actually calm 1012 00:47:03,290 --> 00:47:06,350 Speaker 2: down inflation. That's the the the key cha one of 1013 00:47:06,360 --> 00:47:09,040 Speaker 2: the key channels that's actually being used for it alongside, 1014 00:47:09,050 --> 00:47:11,638 Speaker 2: of course, expecting to see some softening in the labor market. 1015 00:47:11,649 --> 00:47:14,340 Speaker 2: So I think in all those locations, actually, I think 1016 00:47:14,350 --> 00:47:16,679 Speaker 2: Hong Kong is one that I think is a, is 1017 00:47:16,689 --> 00:47:19,360 Speaker 2: a standout from another point of view, which is we've 1018 00:47:19,370 --> 00:47:22,260 Speaker 2: now seen a full removal of all property market cooling 1019 00:47:22,270 --> 00:47:22,959 Speaker 2: measures there. 1020 00:47:23,669 --> 00:47:27,370 Speaker 2: Um And yet we've not been seeing certainly prices making 1021 00:47:27,379 --> 00:47:30,370 Speaker 2: a major recovery. We saw activity that made them come 1022 00:47:30,379 --> 00:47:34,049 Speaker 2: back but not on prices. The other challenge that Hong 1023 00:47:34,060 --> 00:47:35,840 Speaker 2: Kong has and it's a bit of a challenge even 1024 00:47:35,850 --> 00:47:39,219 Speaker 2: for Singapore too is with the also the move in 1025 00:47:39,229 --> 00:47:42,469 Speaker 2: FX Hong Kong dollar against Renminbi, move N FX Singapore 1026 00:47:42,479 --> 00:47:46,659 Speaker 2: dollar against Malaysian Ringgit. We've also been seeing some evidence 1027 00:47:46,669 --> 00:47:49,979 Speaker 2: of some leaking of spending cross border 1028 00:47:50,469 --> 00:47:53,889 Speaker 2: and in particular when, when we see some of the, the, the, 1029 00:47:53,899 --> 00:47:56,959 Speaker 2: you know, talk to people and they'll generally, they'll say 1030 00:47:56,969 --> 00:47:59,449 Speaker 2: either they were or they know someone who did uh 1031 00:47:59,459 --> 00:48:02,169 Speaker 2: cross over into the rest of the Greater Bay area 1032 00:48:02,310 --> 00:48:05,209 Speaker 2: and was spending on and it could be all kinds of, of, 1033 00:48:05,219 --> 00:48:08,290 Speaker 2: of goods and services. Uh People even say doing groceries. 1034 00:48:08,780 --> 00:48:11,790 Speaker 2: Uh And I think that's the interesting angle as well 1035 00:48:11,800 --> 00:48:15,299 Speaker 2: that with some of the ease of transportation that has 1036 00:48:15,310 --> 00:48:17,649 Speaker 2: gone up, say for the case of Hong Kong with 1037 00:48:17,659 --> 00:48:20,169 Speaker 2: the Greater Bay Area integration or in the case of 1038 00:48:20,179 --> 00:48:22,199 Speaker 2: say with Singapore, we're just a couple of years away 1039 00:48:22,209 --> 00:48:24,500 Speaker 2: from having a train connection where it will be that 1040 00:48:24,510 --> 00:48:26,840 Speaker 2: easy to go back and forth. It does mean that 1041 00:48:26,850 --> 00:48:28,799 Speaker 2: you then spread out some of the spending. 1042 00:48:28,909 --> 00:48:30,520 Speaker 2: Of course, you would expect it to come back the 1043 00:48:30,530 --> 00:48:33,080 Speaker 2: other way. But it's a bit more challenged with the 1044 00:48:33,090 --> 00:48:35,899 Speaker 2: FX rates being, having moved in the directions that we've 1045 00:48:35,909 --> 00:48:37,830 Speaker 2: seen in the last year or two. 1046 00:48:37,840 --> 00:48:42,050 Speaker 1: Right. So I think those two are the most prominent examples, 1047 00:48:42,060 --> 00:48:46,030 Speaker 1: Hong Kong, Shenzhen, Singapore, Johor. I think Shanghai Tokyo seems 1048 00:48:46,040 --> 00:48:48,729 Speaker 1: to be another 1 may not be that obvious. But 1049 00:48:48,739 --> 00:48:48,929 Speaker 1: you know, 1050 00:48:49,260 --> 00:48:50,909 Speaker 1: at least when I was in China, it felt like 1051 00:48:50,919 --> 00:48:53,669 Speaker 1: it maybe not for groceries, not for groceries, but maybe 1052 00:48:53,679 --> 00:48:59,100 Speaker 1: for sushi uh David um outlook uh looking at the 1053 00:48:59,110 --> 00:49:01,709 Speaker 1: spending patterns in the first half of the year. What's 1054 00:49:01,719 --> 00:49:04,620 Speaker 1: your sense for Asian travel and tourism? You said that 1055 00:49:04,629 --> 00:49:07,760 Speaker 1: other than a few jurisdictions, we're not back to prepa 1056 00:49:08,090 --> 00:49:09,100 Speaker 1: volume passenger. 1057 00:49:09,330 --> 00:49:11,830 Speaker 1: Are you optimistic that we're by the time December of 1058 00:49:11,840 --> 00:49:13,219 Speaker 1: 2024 comes, we'll be back to 1059 00:49:13,229 --> 00:49:13,580 Speaker 1: par. 1060 00:49:14,070 --> 00:49:16,590 Speaker 2: Well, the first thing, maybe I'll start with the travel 1061 00:49:16,600 --> 00:49:18,669 Speaker 2: and then talk about on the on the spending trends 1062 00:49:18,679 --> 00:49:22,029 Speaker 2: themselves um on the travel front. And as we mentioned 1063 00:49:22,040 --> 00:49:25,590 Speaker 2: in the travel report, that's on the Economics Institute website, 1064 00:49:25,600 --> 00:49:28,989 Speaker 2: the the services website, we actually pointed out that nine 1065 00:49:29,000 --> 00:49:31,870 Speaker 2: out of the 10 busiest travel days in history happened, 1066 00:49:32,479 --> 00:49:35,340 Speaker 2: I think it was this year. So we are still 1067 00:49:35,350 --> 00:49:38,580 Speaker 2: doing very, very well. On how much we're seeing the 1068 00:49:38,590 --> 00:49:41,790 Speaker 2: strength of travel demand, even having not fully recovered in 1069 00:49:41,800 --> 00:49:44,620 Speaker 2: this region. So there's more legs to that, we would 1070 00:49:44,629 --> 00:49:47,100 Speaker 2: argue that we will see even more of the tourism recovery. 1071 00:49:47,110 --> 00:49:51,350 Speaker 2: It's a persistent trend of consumer behavior that that seems 1072 00:49:51,360 --> 00:49:55,060 Speaker 2: to have been a big moments of reflection during the pandemic, 1073 00:49:55,070 --> 00:49:55,459 Speaker 2: turning 1074 00:49:55,830 --> 00:49:58,629 Speaker 2: more towards the being mode over the having mode. You 1075 00:49:58,639 --> 00:50:01,049 Speaker 2: could argue apart from when going to Japan and also 1076 00:50:01,120 --> 00:50:04,840 Speaker 2: retail therapy kicks right back in again. And that full recovery, 1077 00:50:04,850 --> 00:50:07,409 Speaker 2: I think will keep going. And particularly that strength of 1078 00:50:07,419 --> 00:50:10,330 Speaker 2: the consumer from India, the fastest growing major market in 1079 00:50:10,340 --> 00:50:13,359 Speaker 2: the world that could if it can get to 7% 1080 00:50:13,370 --> 00:50:16,129 Speaker 2: GDP growth, that would double its economy every 10 years. 1081 00:50:16,139 --> 00:50:18,689 Speaker 2: It's not quite there but could could could get there. 1082 00:50:18,959 --> 00:50:21,260 Speaker 2: Um That I think the travel side I think is 1083 00:50:21,270 --> 00:50:24,969 Speaker 2: still looking pretty good that that persistent demand now with 1084 00:50:24,979 --> 00:50:28,989 Speaker 2: broader consumer trends to enable some of that travel, with 1085 00:50:29,000 --> 00:50:32,199 Speaker 2: all these challenges we've been talking about, of course, still 1086 00:50:32,209 --> 00:50:34,500 Speaker 2: having a job and the labor market being strong matters, 1087 00:50:34,510 --> 00:50:37,479 Speaker 2: some excess savings that matters, but also some trading down 1088 00:50:37,489 --> 00:50:39,870 Speaker 2: has been taking place. And that comes into the story 1089 00:50:39,879 --> 00:50:43,239 Speaker 2: about what are we seeing on the wallet shares themselves? 1090 00:50:43,389 --> 00:50:47,020 Speaker 2: And we actually drew a doughnut type chart in the 1091 00:50:47,395 --> 00:50:50,375 Speaker 2: 2024 report with the Asia Pacific section. It's also on 1092 00:50:50,385 --> 00:50:53,574 Speaker 2: the website where we looked at mass market consumers and 1093 00:50:53,584 --> 00:50:56,655 Speaker 2: affluent consumers. And we saw the rise in the share 1094 00:50:56,665 --> 00:50:59,475 Speaker 2: of spending on essentials compared to 2019 as a share 1095 00:50:59,485 --> 00:51:03,084 Speaker 2: of the wallet for both. And in general, let's maybe 1096 00:51:03,094 --> 00:51:06,114 Speaker 2: let's give Singapore as a worked example. We did also 1097 00:51:06,125 --> 00:51:07,604 Speaker 2: see the share of wallet 1098 00:51:08,360 --> 00:51:10,979 Speaker 2: accounted for by food was eating into the wallet share. 1099 00:51:10,989 --> 00:51:12,969 Speaker 2: Food has been eating into the wallet share. That's the 1100 00:51:12,979 --> 00:51:16,100 Speaker 2: bottom line here, whether it's on dining or groceries. And 1101 00:51:16,110 --> 00:51:18,399 Speaker 2: we know on groceries when we look at places that 1102 00:51:18,409 --> 00:51:21,939 Speaker 2: do offer volume versus value numbers. Apart from the boom 1103 00:51:21,949 --> 00:51:24,389 Speaker 2: during the pandemic, where you saw people say buying uh 1104 00:51:24,399 --> 00:51:26,090 Speaker 2: toilet paper and loading up 1105 00:51:26,139 --> 00:51:28,610 Speaker 2: on tinned food. Maybe we've not really been seeing a 1106 00:51:28,620 --> 00:51:31,570 Speaker 2: boom in volumes and therefore it's just been some trading down, 1107 00:51:31,580 --> 00:51:35,229 Speaker 2: maybe moving from the branded to generic products to try 1108 00:51:35,239 --> 00:51:39,250 Speaker 2: to counter the rise in the cost of those essential items. 1109 00:51:39,719 --> 00:51:43,120 Speaker 2: But delivery also food delivery ordering in is so much 1110 00:51:43,129 --> 00:51:43,759 Speaker 2: easier 1111 00:51:44,100 --> 00:51:47,000 Speaker 2: and also going out to restaurants. That's been the very, 1112 00:51:47,010 --> 00:51:49,199 Speaker 2: I would say persistent trend. We even see it in 1113 00:51:49,209 --> 00:51:52,479 Speaker 2: the Singapore retail sales data, the official numbers, they're they're 1114 00:51:52,489 --> 00:51:55,040 Speaker 2: they're telling the similar sort of story that they're going 1115 00:51:55,050 --> 00:51:58,300 Speaker 2: out and about to eat particularly though trading down though. 1116 00:51:58,370 --> 00:52:01,040 Speaker 2: So it's not necessarily the broader, more 1117 00:52:01,120 --> 00:52:03,879 Speaker 2: full service restaurants. It's more the quick service and more 1118 00:52:03,889 --> 00:52:05,959 Speaker 2: say the Hawker Centers that have been doing a little 1119 00:52:05,969 --> 00:52:09,360 Speaker 2: bit better. They're the out performers versus regular restaurants. So 1120 00:52:09,370 --> 00:52:10,760 Speaker 2: we get a bit of a trade off there still 1121 00:52:10,770 --> 00:52:12,560 Speaker 2: getting to go out and about. But I think you'll 1122 00:52:12,570 --> 00:52:15,719 Speaker 2: still see that story while we still have this challenge 1123 00:52:15,729 --> 00:52:18,060 Speaker 2: of the high cost of living and high interest rates. 1124 00:52:18,350 --> 00:52:21,089 Speaker 1: So it's interesting on one hand, the affluent want more 1125 00:52:21,100 --> 00:52:23,469 Speaker 1: experience and they want to go to the Michelin restaurants. 1126 00:52:23,479 --> 00:52:25,850 Speaker 1: But on the other hand, for a vast number of 1127 00:52:25,860 --> 00:52:28,399 Speaker 1: the population, the cost of living is hurting and they're 1128 00:52:28,409 --> 00:52:32,050 Speaker 1: training down. So we actually have opposing dynamic within e society. 1129 00:52:32,270 --> 00:52:34,810 Speaker 2: We are seeing that and a good example in the 1130 00:52:34,820 --> 00:52:36,929 Speaker 2: case of say the US, we did see an out 1131 00:52:36,939 --> 00:52:39,949 Speaker 2: performance of say the category of groceries in the budget 1132 00:52:39,959 --> 00:52:42,489 Speaker 2: and compared to say the middle range or the higher 1133 00:52:42,500 --> 00:52:46,009 Speaker 2: range even in 2023 that was already a broad story. 1134 00:52:47,000 --> 00:52:51,580 Speaker 1: Uh David earlier, we were talking about um technological solutions 1135 00:52:51,590 --> 00:52:54,509 Speaker 1: available to consumers for ecommerce and payments and so on. 1136 00:52:54,520 --> 00:52:57,100 Speaker 1: And you talked about the B NPL and the complexities 1137 00:52:57,110 --> 00:52:59,310 Speaker 1: around that. Then you talk about some of these cold 1138 00:52:59,320 --> 00:53:02,500 Speaker 1: wallets that people are using to prepopulate their cards to 1139 00:53:02,510 --> 00:53:05,159 Speaker 1: go shopping. Uh So my final question to you is 1140 00:53:05,169 --> 00:53:09,060 Speaker 1: that just in terms of technology adoption, there's a lot 1141 00:53:09,070 --> 00:53:12,169 Speaker 1: going on out there. Uh What are you seeing as 1142 00:53:12,179 --> 00:53:15,699 Speaker 1: you know, interesting compelling trends out there? 1143 00:53:16,209 --> 00:53:19,080 Speaker 2: Oh, wow. Well, I think a big one, of course 1144 00:53:19,090 --> 00:53:22,299 Speaker 2: around the region has been on social commerce where you 1145 00:53:22,310 --> 00:53:25,370 Speaker 2: could get quite a lot of sales coming through social 1146 00:53:25,379 --> 00:53:29,379 Speaker 2: media networking channels. I think we'll see plenty more of 1147 00:53:29,389 --> 00:53:32,590 Speaker 2: that again though. I think we'll also see in the 1148 00:53:32,600 --> 00:53:35,419 Speaker 2: markets that had historically been a bit more biased towards 1149 00:53:35,429 --> 00:53:38,429 Speaker 2: say yes, an ecommerce order. But then it's cash on 1150 00:53:38,439 --> 00:53:42,310 Speaker 2: delivery that they find more and more ways of going 1151 00:53:42,320 --> 00:53:44,590 Speaker 2: digital on the actual payment front. 1152 00:53:44,729 --> 00:53:46,750 Speaker 2: Well, I think you'll see more and more of the, 1153 00:53:46,760 --> 00:53:50,060 Speaker 2: it's interesting even those innovative companies, as I mentioned, like 1154 00:53:50,070 --> 00:53:54,129 Speaker 2: say Youtrip, where you're seeing the prepaid idea but done 1155 00:53:54,139 --> 00:53:56,750 Speaker 2: in a really slick way, enabling a lot more of 1156 00:53:56,760 --> 00:54:00,009 Speaker 2: those payments and then leveraging a network such as ours 1157 00:54:00,020 --> 00:54:02,909 Speaker 2: to be able to then go, you know, increasingly global 1158 00:54:02,919 --> 00:54:04,679 Speaker 2: with it. I think you'll see a lot more of 1159 00:54:04,689 --> 00:54:07,928 Speaker 2: those types of ideas coming through. The key challenge though 1160 00:54:08,010 --> 00:54:10,429 Speaker 2: is that take the example of the buy now pay later. 1161 00:54:10,560 --> 00:54:12,370 Speaker 2: The big challenge for a lot of those players that 1162 00:54:12,379 --> 00:54:13,149 Speaker 2: didn't manage to, 1163 00:54:13,250 --> 00:54:15,120 Speaker 2: you do as well was to do with the cost 1164 00:54:15,129 --> 00:54:18,159 Speaker 2: of funding. Of course, the bungee jump story and these 1165 00:54:18,169 --> 00:54:20,689 Speaker 2: huge swings in variables such as interest rates and the 1166 00:54:20,699 --> 00:54:23,239 Speaker 2: cost of funding was not probably part of their assumption 1167 00:54:23,409 --> 00:54:26,860 Speaker 2: as was the case. Even in say the for folks 1168 00:54:26,870 --> 00:54:28,879 Speaker 2: who took out mortgages with a stress test that would 1169 00:54:28,889 --> 00:54:31,069 Speaker 2: have been done a few years ago, we've gone through 1170 00:54:31,080 --> 00:54:34,219 Speaker 2: the stress tests in multiple markets right now. So we're 1171 00:54:34,229 --> 00:54:36,620 Speaker 2: in that, that stress period. So I think that the, 1172 00:54:36,629 --> 00:54:40,069 Speaker 2: the new innovations need to also think through, as they 1173 00:54:40,080 --> 00:54:41,629 Speaker 2: think through their business plan. 1174 00:54:42,320 --> 00:54:44,989 Speaker 2: What about the scenarios that could be coming through? And 1175 00:54:45,000 --> 00:54:47,419 Speaker 2: I think we didn't really talk too much. I think it's, 1176 00:54:47,429 --> 00:54:50,219 Speaker 2: you know, it's probably material for some other time anyway, 1177 00:54:50,229 --> 00:54:52,889 Speaker 2: on just the sheer volume of different, what else is 1178 00:54:52,899 --> 00:54:56,040 Speaker 2: and what things should we really be worrying about? From 1179 00:54:56,050 --> 00:54:59,179 Speaker 2: say the geopolitical lenses or from how long do interest 1180 00:54:59,189 --> 00:55:01,459 Speaker 2: rates stay up? What if it stays here for an 1181 00:55:01,469 --> 00:55:05,340 Speaker 2: even more uh prolonged period than we've already had? Can 1182 00:55:05,350 --> 00:55:07,739 Speaker 2: you still say your business model is robust in those 1183 00:55:07,750 --> 00:55:09,330 Speaker 2: sort of scenarios? And I think 1184 00:55:09,939 --> 00:55:13,280 Speaker 2: companies are, I think getting a bit more savvy on 1185 00:55:13,290 --> 00:55:14,959 Speaker 2: thinking through a lot of these things as well 1186 00:55:15,080 --> 00:55:18,169 Speaker 1: savvy and perhaps worried because these are not easy challenges 1187 00:55:18,179 --> 00:55:18,669 Speaker 1: to solve. 1188 00:55:18,679 --> 00:55:18,959 Speaker 2: No, 1189 00:55:18,969 --> 00:55:21,669 Speaker 2: no, not, not, not everything has an easy solution, 1190 00:55:21,679 --> 00:55:21,870 Speaker 1: that's 1191 00:55:21,879 --> 00:55:21,929 Speaker 2: for 1192 00:55:21,939 --> 00:55:25,020 Speaker 1: sure. Not indeed indeed, David Mann. Thank you so much 1193 00:55:25,030 --> 00:55:27,260 Speaker 1: for your time and insights. Thank you. It's great to 1194 00:55:27,270 --> 00:55:29,479 Speaker 1: be here. Great to have you. Um Thanks 1195 00:55:29,574 --> 00:55:32,235 Speaker 1: to our listeners as well. Copy time was produced by 1196 00:55:32,245 --> 00:55:36,054 Speaker 1: Ken Del Rich Pilot, Lee and Daisy Sharma provided additional assistance. 1197 00:55:36,264 --> 00:55:40,344 Speaker 1: All 128 episodes of this podcast are available on youtube 1198 00:55:40,465 --> 00:55:43,304 Speaker 1: as well as on Apple and Spotify. As for our 1199 00:55:43,314 --> 00:55:45,814 Speaker 1: research publications and webinars. You can find them all by 1200 00:55:45,824 --> 00:55:49,114 Speaker 1: Googling D BS research library. Have a great day.