Lend Academy's Lending and Fintech Podcast

PODCAST TRANSCRIPTION SESSION NO. 236–MONICA BRAND ENGEL

Welcome to the Lend Academy Podcast, Episode No. 236, this is your host, Peter Renton, Founder of Lend Academy and Co-Founder of the LendIt Fintech Conference.

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Today’s episode is sponsored by LendIt Fintech USA, the world’s largest fintech event dedicated to lending and digital banking. It’s happening on May 13th and 14th, 2020, at the Javits Center in New York City. Lending and banking are converging and LendIt Fintech immerses you in the most important trends of the day. Meet the people who matter, learn from the experts and get business done. LendIt Fintech, lending and banking connected. Go to lendit.com/usa to register.

Peter Renton: Today on the show, I am delighted to welcome Monica Brand Engel, she is a Co-Founder and Partner with Quona Capital. Now, Quona is a very distinct firm, they’ve been around for a few years. Monica has actually deep experience in the space and that is early stage venture in emerging markets and Quona have done several investments, some names you’ll probably recognize if you’re focused on emerging markets, we get into a couple of examples of companies that they have funded.

We talk about the geographies they’re working in and why they chose those geographies, we talk about what they’re looking for when investing in a fintech company, and we discussed the general state of Fintech for Good, or financial inclusion, and why it’s really growing in popularity in recent years and we cover much more. It was a fascinating interview, I hope you enjoy the show.

Welcome to the podcast, Monica!

Monica Brand Engel: Happy to be here, Peter, thank you.

Peter: Okay, my pleasure. So, you have a very interesting background, you know, you’ve worked in venture, in early stage investing for some time, so why don’t you give us a little bit of the highlights of what you’ve done in your career to date.

Monica: Sure. I’m half Peruvian and had my formative years in Silicon Valley and I share that because I think they both really formed by journey. So, as a daughter of immigrants, we sort of had a lean startup as a family ethos (Peter laughs), but also had this police of abundance if you compare kind of life in emerging markets, especially when Peru which has gone through different political regimes and you contrast that to Silicon Valley early, even in the 80’s and 90’s, where the idea that there is a true meritocracy, that great ideas matched with a sort of view that anything is possible and I was caught in a spirit of generosity.

When I think, what really struck me while living out on the West Coast is just everyone would open up a conversation and “how can I help you.” I think that notion of “how can I help you” just again start your ideas, get the resources you need, find the talent to build on, the innovation, that really formed sort of my career and focusing on financial services and also really formed the founding of Quona which is a venture firm focused on fintech for inclusion. So, the threads of my career were definitely a product of my environment, but also, personally, I’m very left-brained, in terms of where my sort of super powers are.

But, actually, what gets me up in the morning is actually the connection with people, the sort of right brain, the creativity, and so marrying left brain and right brain is also what we’re trying to do with Quona; marrying profits and purpose, marrying financial services and technology, marrying the developed world and emerging markets. It’s the power of the end that we think the magic happens, so…

Peter: Okay. So, I noticed that you worked with Accion for a number of years, and maybe you could tells us….I know you still have a close relationship there, so maybe tell us the founding story of Quona Capital and how it all came about.

Monica: Yes. So, after business school, I really wanted to…..I had been in Silicon Valley for seven years at that point, I graduated at Stanford and everybody in the late 90’s and everyone was sort of doing the dot com thing, and I really wanted to go into emerging market, again, back to that calling of my background.

I ended up in South Africa mainly because of an inspiring story of what’s happening with Mandela and post-apartheid, but, actually, because of the seed I had planted, it was then constituted to responsible business, now called net impact. A friend of mine in another business school said, you need to come to Accion, and even though I was living in South Africa, living the dream, it was a phenomenal experience there, I came back to join Accion to run product innovation.

The reason it worked were two things that were also very critical to the founding of Quona. The CEO at that time, his name was Michael Chu said one, the only way to solve a problem as immense as poverty is to mobilize resource equally as plentiful and that’s the world’s capital markets. The second thing he said to me was, Monica, you can’t be patient with poverty and that if you want to find solutions, you have to go to the private sector because they’re the only ones who work at the pace that we require, and we don’t want to be patient with poverty.

And so, I joined Accion as head of Product, this is during the time when Clayton Christensen had written Innovators’ Dilemma told them…I hadn’t read it, where I was trying to help Michael find institutions innovate and develop new products which is what they said they wanted, but yet, it was really hard to get successful institutions to diversify away from what was making them successful.

And it was in that frustration that ….actually, I moved to Mexico thinking I just wasn’t close enough to the client working with one of Accion’s leading micro finance partners and it was Compartamos Contendera one of the largest micro finance institutions in Latin America and they had an IPO and that the windfall from that….and Accion was always investing along with doing advisory services, again, something very important to Quona where we invest our operating know-how with capital. That started that seed, the idea of that powerful combination was granted in Accion who with the proceeds of that IPO helped fund Quona’s predecessor, it was called Frontier Investment. And it was in that idea…..by the way, Compartamos was criticized when we first had the IPO saying, how can we say you’re helping the poor and make money.

So, that’s a seeming contradiction which we thought was a false trade-off. We really believed that there can be money you’re needing and so that really led to them offering me a job to start a portfolio where we would do fintech, not just traditional financial services. So, invest instead of trying to help sort of brick and mortar institutions innovate, we were going to invest in new fintech technologies that would have new business models, new types of products, new approaches to radically approve access and quality of financial services.

That is really what led to the creation of Quona where we found both Accion who became our investor in our fund, as well as other outside investors like J.P. Morgan and TIA, Prudential, very mainstream financial institutions that really wanted….really believed themselves that innovation was going to come from sort of new ways of thinking, new startups and that’s where my co-founders came in and we’ve created Quona Capital.

Peter: Okay, So, your investment strategy, is it …..I mean, I get it, it’s right there on your website in “fintech for inclusion” so that’s pretty clear, but are you focusing on like really early stage companies, are you doing seed, are you doing Series A, what is the investment strategy?

Monica: So, we have a very focused investment strategy because when we launched Quona, this is now in 2013, we were an anomaly and we were backing a trend. At that point, venture capital as an asset class was coming off the poorest decade of performance in its history, really a result of two funds getting too big and earning money off of management fees rather than carried interest. We were also backing a trend of looking outside, looking to emerging markets.

Remember, this is a year, or two before Brexit, the election of Trump and other policies that were really focusing on sort of Me First and focusing on national needs versus global. And also, backing a trend of this idea of doing impact investing, I think it was still kind of an unproven concept, or even micro finance. It had been discredited by some bad actors, I mean, India, and so even the idea of micro finance being a good thing was always in question. So, we were starting a venture firm in emerging markets focused on fintech for inclusion, so everything….so basically, we should have been three strikes right off the door (Monica & Peter laugh).

But, I think, a few things, one, we have conviction, so remember, my partners and I all had come from emerging markets, we had all worked with businesses there and I think that gave us a real appreciation that things happen in cycles. That’s just the way…..you know, there are times when certain countries and markets are out of favor, but they always come back with growth and this idea of just the enormity of the market opportunity we’re facing and we’re talking about basic fundamental needs, things like having a transaction account so you can pay your bills, or having a loan to finance your business, or send your child to college, just very, very fundamental products and services that did not exist, or that were too expensive because of the way the financial system was structured in those countries.

So, we just saw……you know, if you see that this is a business opportunity that new technology creates, especially with things like the proliferation of cell phones and smart phones, and the expansion of Web 2.0 which allowed you on how to create a tech company for a fraction of the capital it used to cost. So, this was the sort of the perfect storm of forces and factors that really gave rise to our creation of Quona.

I would say we had some enlightened LPs that were willing to take a risk and I think that’s where the role of Accion going to put the first $20 Million check in that really helped sort of, again, putting money where your mouth we all were, putting skin in the game that really helped bring those forward thinking LPs to the table, and I don’t think were disappointed in terms of our results.

Peter: Okay. So then, what stage are you looking at, are you looking at the startups, or…..

Monica: Yeah. Our focus is….. to make them comfortable we do not do startups, so we look at Series A as a sweet spot, so usually at least a million in revenue with kind of our rough estimate of what we say we need to see product market fit. We want to see companies that we can do risk to actual recurring revenue, to management teams that have knowledge around these markets and by focusing on countries where the enabling environments, meaning regulation, other venture players, sort of lots of thriving entrepreneurship happening, all that exist in the core markets where we work.

So, LatAm, in Brazil with sort of increasing focus on Mexico, in South Asia, India, with increasing focus on Indonesia and other countries in the Southeast Asia region and Sub-Saharan Africa, South Africa, we’re adding Kenya and Nigeria as our wing countries. So, focused countries, targeted de-risk companies at Series A, so not exactly pre-revenue and we’re focused uniquely on fintech in emerging markets.

Peter: Sure. So then, maybe you can just talk us through a couple of the portfolio companies that you’re excited about.

Monica: Yes, I would say it’s sort of like asking a mom about her favorite kid, I love our portfolio companies and I think maybe I’ll give some examples of the ones that have I think some really incredible traction recently. So, maybe starting in Brazil, we have a company called Creditas which is really the first formal home equity finance and auto equity finance player in the market. So, this is the market where there actually is a decent number of sort of emerging middle class consumers that actually own assets, maybe own a modest flat, or they own a vehicle, but yet there was no product before Creditas that would allow them to use those assets to gain liquidity.

So, if they wanted to send a child to school, if they wanted to have add a roof, or an addition, they would actually have to take out triple digit credit card loans, until Creditas brought up the idea of asset-based financing so secured loans which allows them to charge a fraction of what typical consumer credit cost, allow them to go to market with a very a compelling value proposition and resulting in growth that has just been explosive.

Since then, they’ve now expanded into other areas like other types of salary loans and other kind of adjacencies, but the core product and really that customer centricity and solving a market failure has been core to their business. So, that’s in Brazil as an example.

We have a second one in South Africa, we have a company called Yoco which is a mobile point-of-sale. You think of Square, or iZettle, or this idea of bringing merchant, or digital acceptance down to a smaller business level, not just sort of places where wealthy people shop and really making the unit economics of that proposition compelling which is exactly what Yoco did, really focusing on the small,…..we call them long tail, the small business, that informal, or the semi-formal sector…..where 40% of Yoco’s customers have never accepted a digital payment before.

And they did it by taking kind of the pioneering work of the iZettles, Squares and adding another layer in terms of creating a value proposition where they bundle-in other services that are of interest to a small business operating in Africa. So, this has been a phenomenal team and a really great journey of a company that has grown tremendously since our initial investment in now 60,000 merchants which is, you know, almost the next one we started in our Series A investment.

Peter: Right, right, I’m aware about these companies. Both are quite impressive. So then, maybe let’s talk about how big the fund is, are you on your like second, or third fund round, I’m not so sure where you are in that cycle. What’s sort of the typical investment size?

Monica: Sure. We’re actually four days away from closing….I have to be careful about what I say publicly, you since, since we are SEC-regulated, we are ……I’ll give you facts, we are on our second fund which we’ll close on Friday, so the assets under management will be just over $350 Million assets under management and that includes the post third party funds so it manages…..as well as the balance sheet deal, the original balance sheet Accion acceded.

So, typical investment from each of those funds are very similar, so the strategy has not changed really from fund to fund because it’s working. So, initial investment size is anywhere from $2 to 6 to 7 Million initial check size and we reserve anywhere from 1 to 1-1/2X from follow on capital. Clearly, we invest more than 1-1/2X and the winners and, you know, there are some companies where the loans doubled down, so classic venture strategy in terms of how we deploy our capital.

Peter: Okay. And then, what about your LPs, I know you mentioned Accion helped you get started……obviously, you don’t have to name names, I’m curious about who else, or what the kind of LPs you have contributing money here.

Monica: These are nominal LPs and I have to say, I didn’t really appreciate it until in retrospect. So, you know, one, we have actually a small institutional investors, and actually mostly private investors, so kind of, you know, investment banks that you would know, sort of marquee investment banks that have, through their private banking, through their own clients showing interest have sort of stepped up and put us on their platform sometimes.

In some cases like J.P. Morgan actually invested directly off their balance sheet, then insurance companies through sort of very prominent insurance companies in both US and Europe that see financial inclusion and fintech as an important compliment in a way of bringing their service to emerging markets which is….you probably know insurance…there is very low levels of insurance penetration in most of the markets where we work.

Another big category investors are family offices and university endowments so, you know, kind of companies, I would say, of balance sheets that are more interested in multiples of cash than IRR being kind of permanent resources of capital and we’re looking to deploy that, you know, effectively. So, you know, and maybe the last category would be the development finance institutions which is always sort of steady supporter of emerging markets, in general, emerging markets, private equity and venture. So, really great LPs, mostly large institutional LPs and we’re complimenting that with folks from Silicon Valley and Asia, places where we see venture really thriving and where there’s an interest among traditional venture players in sort of the markets that we are targeting now.

Peter: So, what are those markets because the developing world is pretty diverse. Obviously, you’ve got probably a total number of countries out there, that’s a huge number of countries that sort of fit into that space, how do you decide which countries specifically to go into?

Monica: It’s a very thoughtful analysis. We pick regions, I mentioned Latin America, South Fiji, South Asia, Sub-Saharan Africa, within those we are focusing on countries that have three things in common. Number one, there is a large addressable market of underserved consumers looking for quality financial services, so just the size of the market alone is a very important criteria.

Two, is having the right enabling environment and when I say enabling environment that begins with obviously macroeconomic stability that we’re not in any sort of war torn countries, but also smart regulation that actually has a set of rules of the game so that it’s clear sort of where these companies fall if they need to apply for licenses as there’s sort of enlightened understanding of e-KYC and digital banking and all of these innovations that have come up because of fintech startups.

Three, the third characteristic is what we call a thriving venture ecosystem, so there are other venture investors, there’s sort of incubators and accelerators with active entrepreneurship happening. So, all three should be there for us to even begin looking. It’s not that we’re strict, but where we focus our attention that’s why 75% of our portfolio to date is in Brazil, India and South Africa. So, it’s not a coincidence that those are our core markets.

That said, emerging…you learn when you work in emerging markets is that they’re very dynamic and the changes happen in real-time, so with these new funds, we just put someone on the ground in Mexico because we think that’s a very, very exciting market that is also a very large addressable market where we think it’s ripe for fintech innovation.

We also added someone in Singapore given the Southeast Asia interest like Indonesia we just did a really interesting deal in Thailand, we see the growing focus up. India is still a very important part of our portfolio, but in addition to India there are interesting companies throughout Southeast Asia that we’re beginning to explore.

Peter: Okay, that makes sense. So, what about…..I’m interested in what you find as far as….I mean, fintech has many verticals. Fintech for Good can ….there’s all kinds of different companies that could fall into that broad category, so what do you think are the most interesting areas? Where is Quona Capital focusing their efforts in the different verticals within Fintech for Good?

Monica: Yeah. Because we are looking at the mass market, what are those kinds of verticals, those financial service sectors that are really going to be able to address literally the billions, or hundreds of millions of underserved consumers and small businesses because we look at those SMEs, small/medium-sized enterprises as a very interesting marketplace as well as reaching consumers. If you focus on those two, there’s sort of, I would say, there are a bunch of business models that we have, because we’re very thesis-driven, but I would say it is probably where the bulk of our work goes starting one is alternative lending.

So, half of our portfolio is balance sheet and when I say alternative lending, you know, think of OnDeck for emerging markets, that’s Konfio in Latin America which basically provides what a micro finance institution does, but does everything digitally. So, underwrite, you basically require consumers to do performance marketing, digital marketing, underwrites using data that is generated electronically by geo-locating the person, or looking at their cell phone, or payment history. Increasingly, a lot of our small business lenders looking at what we call e-invoicing.

So, many governments in Latin America, as well as globally, are beginning to acquire merchants to capture electronic invoices at every payment and they do that more as a tax collection. You avoid sort of business that doesn’t get reported under the table, but corollary of having a database is that lenders like Konfio, as well as Lulalend in South Africa can tap into a very powerful database of transactional history, so you are underwriting based on actual cash flows, not on the value of a piece of equipment, or the willingness of my dad to put in collateral, so it’s a very powerful tool. So, alternative lending, and that’s the business side.

On the consumer side, I imagine, Creditas is another great company, but I did not mention earlier, Zest Finance in India where they’re basically lending at the point-of-sale. So, knowing that, you know, plugging into both e-commerce as well as offline retail allows a very powerful way to not only sort of be present for the consumer when they need the credit most, but actually focus and make sure that your credit, consumer credit is being used for sort of value enhancing like it can be good, you know, versus some other things that…..you know, gambling, for example, that credit could be used for, so alternative lending is a very big place.

Maybe, sort of corollary to that, because early in our days, looking at specific lending verticals was a big focus and what we’ve seen over time is that lending is being tied into other deposit taking and other services to develop challenger banks. We have a couple of challenger banks in our portfolio. We’ve got Neon in Brazil, we just made an investment four/five months ago, and a company called Klar in Mexico. The idea there is basically to not just take lending, but all of the services that one might use a bank for and make that experience digital, N26, or Monzo, very clear analogues in a developed world and there’s no reason why that’s the same question now, those successes.

The developed world shouldn’t happen in the emerging world so challenger banking is another area that we’re excited about. Maybe the third I would know is payments, and so, again, taking that piece you obviously think about the transactional…..I mentioned a long tail, so there’s still much of the digital world that is happening now because you have mobile banking, for example, or proliferation of cards. There’s pre-paid and even as Mastercard and Visa, being the most common, sort of a concerted effort focused on emerging market.

There’s still the challenge of the acceptance environment, so how do you make an economic proposition for a small business to accept digital, to pay that interchange. And there are a bunch of companies that are creatively picking it up, how to make that value proposition more compelling for the merchant so that you have both sides of the transaction working. The consumer that increasingly uses digital as well as cash and the merchant who sees the value of accepting digital as well as because it’s not immediately obvious, especially if you stock your own shelves, or the suppliers work in cash.

So, it seems obvious, but it does take a real understanding of the driving forces to make those businesses operate. And then it’s also …the last is Insuretech. Insuretech is one where I would say digital lending, or banking was, maybe five years ago, and we’ll see some really interesting models growing out of Insuretech as well.

Peter: Okay. So then, how does a company get on your radar, how do you reach out to these companies? Obviously, there’s a….I’m sure you get a lot of inbounds, but I’m curious about how do they….what ‘s it going to take to get like a meeting with one of your people?

Monica: Yeah. I would just say, we are swimming in hundreds of companies. You know, we’ve got Salesforce database where we try to prioritize. It’s actually a bigger challenge, how do you decide, how do you spend your time, and the reason why they switch to these pipelines…. one is it’s a really important need. There are phenomenal entrepreneurs, graduates of business schools in the US, or Europe and they’re sort of working at a bank. Locally, they’re actually going back home to emerging countries because they see there’s a much more compelling market opportunity.

And so we are there, we are both what we call “global local,” so with people on the ground in Mexico, Bangalore, Singapore, Cape Town, Lagos, you know, Quona staff who live there as well as travel to adjacent markets and all we do is go to our board meetings observing our existing portfolio and talk to new entrepreneurs.

I mean, we also spend a lot of time….I mean, we really believe in ecosystem, so we also spend a lot of time in dialogue with our other fintech investors, whether they’re mainstream fintech investors from Silicon Valley, or whether they are in New York that are wanting to explore emerging markets, or maybe I’ll cal them “generalist venture investors” that have a presence in these emerging markets and want to go deeper in fintech, so it comes from a lot of places.

But, we are in markets constantly and I would say kind of, you know, every other week speaking to entrepreneurs, so the pipeline is very rich. I think the challenge is how do you sort of place your bets in companies because the great ideas is not position. You really need to get that product market fit right and that is a process, it is a process of trial and error and a lot of ingenuity to make everything work.

Peter: Right, right. I’m just taking a step back, I mean,  I just want to get your perspective, someone who has been in this space for a long time. From our perspective here at LendIt, we noticed the last two years there’s been a really significant uptake in interest on financial inclusion and financial wellness, in general.

There was very little call for it for us, from our perspective four, or five years ago, from just the general sort of fintech community now…all the sessions we have are packed and there’s lots if interest we get, applications coming in all from all over the world with really interesting ideas….I’m curious. For someone that’s spent, you know, the last couple of decades, it seems, in the space, did you notice that? Is there a general community, a much greater interest in Fintech for Good?

Monica: Absolutely, and to me, it’s a huge success. So, I mean, the thesis around Quona is pretty much marginal to make it mainstream. Remember, I told you, when we started Quona everything we were doing was antithetical to what the common trends were, and I love that actually now we’re not so unique in some ways. The people do really see there is a very compelling opportunity here and where I think it’s happening is for three reasons.

First, there is this enormous market, so if you are fighting for the 1%, or the 10%, these are very limited spoils. So, I think, part of it, quite frankly, you were very generous to call Fintech for Good, I think people just see enormous addressable market and so, I think, that number one, where is the opportunity.

Number two, I think there had been some success stories that happened to exit. You look at  Pan Seguros, or Stone Pagamentos, two payment companies, Bank Seguro, in particular, that’s focused on the long tail in Brazil. It’s a billion dollar company, and that’s … had an IPO in the last two, or three years, so, I think, seeing these success stories happening in emerging markets also validates the thesis, not just an interesting idea, so I think success. The third, I would say….you know, because, again, those successes are still limited if you compare them to the number of clients in the West, for example.

But, I think, the third point, which actually I think predicts more success, is if you look at the fundamentals here in economics. So if you look at WeWork, or some of the scandals that have happened, you know, companies where you kind of dig beneath the surface and the numbers don’t make sense. You could build the company and not building economics, so if you just kind of dig underneath the …….and look under the hood and see, again, the great margins that focuses some of these business models has because of great uses in technology, or the stickiness, the customer retention so that you’re acquiring customers organically, not spending more than it cost.

You know, the revenue generate the contribution margin of bringing them onboard. If you start really digging, you that these are fundamentally sound, not just sound, but they are attractive businesses that will compare against any margin in a western company. So, I think all three….people are driven by different things, but any three of them are why we see this rush to quality.

Peter: Interesting. So then, we’re almost out of time, but before I let you go, a couple more questions. I’m curious about ….when you look at the emerging markets today, like what are the biggest challenges that the people are still struggling with, what needs to really change to bring these countries into a lot better financial situation?

Monica: I would say, number one is in the information asymmetry. So, there is this risk premium that is not really based on reality. So, for example, if you look at what it costs for credit in these countries…..I mentioned earlier that half of our portfolio are ….we have alternative lenders, we have balance sheet businesses, about half of our portfolio, and so that means that their input there is debt. They need to provide a loan, you need to have your own debt capital and it cost them a ridiculous amount of money, equity rates to cost of capital to provide debt.

The fixed income product with a payment schedule that, you know, we…..there are companies that have a fantastic history are repaying, and so there is a real…. I think if you ask why is that so, a little bit is FX. So, there is a lot of volatility in the FX market which means the cost gets built in, it’s quite high to capture that volatility, but also just a supply demand. There’s just not enough lenders willing to operate in our market, that’s changing. Certainly, Latin America is probably covered with the most advanced in terms of having very deep pools of their capital available, but I would say that’s a very ….until that gets fixed, you’re going to have a very crazy phenomenon that we have now where equity is funding loan portfolios.

So, you have a total of new kind of, you know, mismatch on sources and uses. I think, secondly, it’s going to be what I call the “talent gap.” What I mean there is……I mentioned earlier that there is what I call this reverse diaspora where folks may be…..you know, we’re born in emerging markets, we go to the West to go to school, maybe take a first job, then come home and they’re very excited about coming home because, again, there is compelling opportunity and really exciting dynamism that’s available.

But, you go a layer down and like have you hired a c-suite and your manager, and there is a big talent gap that has to do with education quality in many of these countries. Again, it’s not…..you know, Brazil…..a lot of our countries have phenomenally strong technical schools, but there is a growth that’s happening in the sector. The talent has not kept up with that growth. I think there’s going to be some important gaps when it comes like (inaudible), there’s a lot of companies trying to address that gap, but I will say that there are still much more needed to drive that.

And then maybe the third thing I would say is what people really believe at Quona. Venture has become kind of a dirty word, I can say Venture for Good, but I often say our vision is to bring venture capital to emerging markets and when I say that, I mean, what venture was to me when I first got to Silicon Valley which was the combination of innovation, grit and smartly structured deals to build life-changing businesses.

I think now, venture is associated with money and greed and other more nefarious things and I really want to bring the good back to venture. I really do think venture will apply as a powerful tool and should not be maligned because of some bad actors.

Peter: I completely agree. We’ll have to leave it there, Monica, I really appreciate you coming on the show today.

Monica: It’s been a pleasure, thank you so much.

Peter: Okay, see you.

Monica: Cheers!

Peter: You know, I said many times the real promise of fintech is to help those, or bring those who are underserved into the modern financial system where the opportunity for that is greatest in these developing countries that’s why I think the work that Quona Capital is doing is so important.

But, people aren’t going to invest just out of the goodness of their heart, they want a real monetary return and that’s what companies like Quona are demonstrating that the opportunities here are vast, these are large markets that are not as competitive as some of the western markets that’s why I think….and as Monica says, we’re seeing more attention given to these markets than ever before and I think it’s a great thing.

Anyway on that note, I will sign off. I very much appreciate you listening

Today’s episode was sponsored by LendIt Fintech USA, the world’s largest fintech event dedicated to lending and digital banking. It’s happening on May 13th and 14th, 2020, at the Javits Center in New York City. Lending and banking are converging and LendIt Fintech immerses you in the most important trends of the day. Meet the people who matter, learn from the experts and get business done. LendIt Fintech, lending and banking connected. Go to lendit.com/usa to register.

PODCAST TRANSCRIPTION SESSION NO. 235–DAVID BREAR

Welcome to the Lend Academy Podcast, Episode No. 235, this is your host, Peter Renton, Founder of Lend Academy and Co-Founder of the LendIt Fintech Conference.

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Today’s episode is sponsored by LendIt Fintech USA, the world’s largest fintech event dedicated to lending and digital banking. It’s happening on May 13th and 14th, 2020, at the Javits Center in New York City. Lending and banking are converging and LendIt Fintech immerses you in the most important trends of the day. Meet the people who matter, learn from the experts and get business done. LendIt Fintech, lending and banking connected. Go to lendit.com/usa to register.

Peter Renton: Today on the show, I’m delighted to welcome David Brear, he is the CEO and Founder of 11:FS. Now, you may know 11:FS from their podcast series, that’s how I got to know them. They also have a very popular video that was out late last year, but they are so much more than a media company.

They are doing all kinds of things, you know, including providing banking infrastructure and consulting and they have a product where they record user journeys from different fintech companies and banks and all kinds of technology companies all over the world which we talk about. We talk about all those sort of things, we talk about what’s wrong with banking today, what banking is going to look like in the future, and much more. It was a fascinating interview, I hope you enjoy the show.

Welcome to the podcast, David!

David Brear: Thank you very much for having me.

Peter: My pleasure. So, I’d like to get this thing started by giving the listeners some background. I know, you’ve had an interesting career, you spent a lot of time in banking. It seems like digital banking has been something you’ve been focused on for sometime, so why don’t you give the listeners some of the highlights on what you’ve done today.

David: Yeah, banking was very much my second love and, fortunately, rather than my first love. I sort of grew up very much kind of… emphasis on playing sports and running around really. Unfortunately, after a career-ending injury, so all three ligaments in my left knee, I had to get a proper job. So, really surveying what was the most interesting space sort of 20 years out, and I was looking at either oil and gas which seemed to be unsustainable, or the technology industry, or financial services.

So, I had a bit of a gritty gap so I sort of found two out of the three, so went into the computing side of things and then started on a bit of a safari around financial services. So, myself, personally, I worked in big banks, big insurers, big management consultancies, off-shoring companies and really that all leads me to believe that digital banking is really something unfinished. With all of these changes that we’re seeing when it comes to technology and everything that’s actually happening in the lateral industries, resetting what customers’ expectation is, then obviously there’s so much more really in this journey to go.

So, hopefully, we’ll start to see a lot more real innovation coming through. In all honesty, I don’t think we’ve actually seen digital banking yet, it’s this thing out on the horizon. We’ve seen digitized banking, we’ve seen people take very much what they’ve got in the analogue world and sort of dumped it down for distribution through digital channels, but it really does not mean the same as what digital really is. So for me, that’s what we do today, we’re helping people bring about that change.

Peter: Okay. So, we’ll get into more of that in a bit, but I wanted to just give the listeners the founding story of 11:FS like how did you guys get together, what were you trying to achieve, just tell us all about how that came to be.

David: Yeah, sure. 11:FS is nearly four years old now, so four in April, so really I had kind of an inkling that I’d and do something, I would build a thing, but I needed enough knowledge to actually go and make that happen. I think so many people get really preoccupied with being an entrepreneur and starting a business and they often do it before they really, really can make that type of change happen, or even to the point where they’ve got a sustainable model around them that actually is not only from a financial perspective, but just from a network perspective in terms of the people that you bring in.

So for me, after working in all those angles of financial services, I thought, you know, I think there’s probably a better way now. The industry is at a real inflection point, and actually, over the next ten years, I really feel like the whole fabric of financial services will be changed, whether it’s the technology, whether it’s the fundamental structure, the operating capability, even the competitors there are in the space. You know, I think what it actually means to be a financial services company in 2020 is really up for grabs.

So to me, that’s the most exciting thing. You know, at that point, I was like whoa if the whole world is changing, then actually, we should try and bring about some of that change and really shape what that means and shape what happens in the industry, So, we founded 11:FS and, actually, you know, I still stand by the hardest thing which was really the beginning. Actually, once you’ve started something successful then the momentum behind it is really sort of magnetic. It continues to draw in interesting things and draw in interesting people.

But, going from, you know, leaving Gartner where I was running their global banking practice to actually getting other people who believed what I believed was an interesting challenge, but, join they did. I had Jason Bates joining, he was a Co-Founder of Monzo before this, Simon Taylor joining, who previously was running the Blockchain R&D Division of Barclays Bank and also Ross Methven, who was previously running the Research Practice at a research house called Mapa.

So, having the merry band together and sitting in a Starbucks is as many a good startup stories begin. We sort of began on….we believe that the fabric of financial services is changing then how do we have the impact that we wanted. Fast forward three years/four years, we just have over 180 people, we built out brand new greenfield banks all over the planet, we’re building our products for ourselves and have now a good fund of (garbled) as well.

Peter: Okay, I want to sort of dig into the different things…..you have a lot of components to your business and  I got to know you from your podcast that I’ve been listening to now for many years and it’s an excellent show and I’ll link that in the show notes here, but why don’t you just describe, you know, the different components…maybe just quickly …summary of different components then we’ll dig into each one.

David: Yeah, sure. I mean, we really focused within 11:FS on culture and talent. I own a (inaudible) and there are only two things that really, really matter in this world. If you have the right talent and you unlock that potential, you unleash that potential with the right culture then whatever sort of place (inaudible) emphasis, we shine that light on, we can do better than anybody else.

For us, that really sort of breaks down into two main areas of the business which is, we have a services business where we are working with people to define what it is that they should be doing and then I actually put that into action, whether it’s building a brand new greenfield organization in the US, or whether it’s building a brand new thing over in Hong Kong. It’s really not just about PowerPoint on what the idea should be, this isn’t a strategy, this is about execution. So, how do you put in place the right product, how do you put in place the right designers, or engineers, even down to how do you create a new age of really what service  actually is.

On the other hand of the business, what we’re doing is we’re building products and actually help people make that journey more efficient. So, we have two of them that are in the market right now, but we’re working on many more. One of them is called 11:FS Pulse which is a global benchmarking tool and I had the idea for this bank when I was working at Lloyds Banking Group because I got really frustrated with people basically having this process called ideation at the beginning of all of their projects which to me was essentially just configuring out the knowledge that they should know to do the work for us in the first place.

So for us, well, Pulse is a global benchmarking tool, you can go in like you do with Netflix, type in any fintech, or any bank on the planet and it’ll play back the actual experiences that they give to their consumers because why start with a blank sheet of paper, why not start with where the best has left off.

The other product that we have is called 11:FS Foundry, this is….what we really believe is if you build a technology stand from today with all of the advancements, with all of the commoditization around technology in both the cloud space, the data space and even actually collapsing the monolith that many organizations have as single engines, what would that look like and what would it be. And that’s what we’re set up to do with a partnership actually with the biggest bank in Norway. We are building out with Foundry really a network of networks, it’s about how do we pull together organizations to really fix the problem that they will have which is legacy technology.

Peter: So, would you say that’s the biggest problem with banking today, particularly with the larger banks? Maybe before we dig into those pieces there, I’m just curious to sort of giving you a….obviously you’ve had your time at a large bank, consulting at large banks, is technology the issue, or something deeper?

David: Honestly, I think if you ask any big bank, you know, middle management will say it’s regulatory, middle management will say it’s technological, but, fundamentally, it’s cultural. You know, if you look at any organization globally all they do to scale….the reason why they cannot deliver the things that they want to deliver comes down to not what they want to do, but, fundamentally, the way in which they do it.

I think if you look at any organization that has been successful, and fortunately, what happened in many instances, is they sort of also fire around the thing that may have been successful which when the market conditions were exactly is where they needed to be, it was fantastic. But, fundamentally, when those market conditions change then the tactic that you deploy are just fundamentally not the right tactics so the market in the way that they need to be.

So, you know, in a world where not so long ago big Big Bank A only had to worry about Big Bank B, or Big Bank C, nobody really had to do too much to keep up with one another and the technology that was underpinning these organizations sort of the most created this annual cycle of change. You know, the big transformation, the big campaign that kind of came forward, the billion that was going to be spent to kind of move the company forward….but, the reality, the world that we live in today where fintech is shown actually 15 or 20 people who are highly trained and highly motivated can do more than 5,000 people without that ability. This is really where big organizations are being shown a better way.

You know, the advent of fintech, categorically for me, is not really….the benefit is not really about….actually, you know, small organizations taking over the bigger organizations. In fact, the bigger organizations should suddenly have had the option of doing nothing taken away and because of this, what we’re seeing is really big global organizations, really big banks and even smaller community banks realizing that actually if they did what they did 30/40/50 years ago, but did it today, they would be in a completely different place than they were before and many of the work that we take on right now is really sub-focused out in that spot.

Peter: Interesting, interesting. So then, what about the digital…..15, or 20 guys and some of these digital banks now getting a lot bigger than that….like I’m curious about the impact of these digital banks. Obviously, it’s been a wake up call for the banking system. The thing that I find super interesting is the big banks, despite their challenges, are very profitable and the challenger banks, despite all their advantages, are not profitable. How do you sort of juxtapose those two things?

David: Yeah, I mean, we’re looking at two things in the same industry at very different points in their life cycle, right. If you were to look at a Bank of America with a two-year Internet cycle, they would have been in a fundamentally in a different place as well. You know, they didn’t stop with 200 different products and, you know, 100,000 people doing front line customer services, they didn’t stop with the brands that they have today. So for me, really fintech is doing an amazing job at acquiring customers.

You know, if you look at China, or in the US, what is it, 5 million customers that they have now, so you think they’re not having an impact is I think sort of wishful thinking on their bank side of things, but they’re definitely not at the point where they’re really taking massive chunks out of the revenue models of the biggest banks. Now, that doesn’t say that other people are not doing that because, actually, if you look….I think in the US market, the biggest threat actually to the top five banks is actually outside of industry threat. You know, if you look at ….when I say outside of the industry, I don’t just mean outside of financial services, I actually mean out of  financial services bias who fundamentally don’t offer those products today.

If you look at pretty much at the strategy that Goldman Sachs is deploying right now is hey, we’ve got lots of money, how can we really shake up financial services in the US, like how can we deploy our balance sheet with partnerships with, you know, Apple, to Apple card, or with Amazon for lending, or whoever else has got major distribution base because, you know, the thing that people always hold on to longest and, you know, history sort of teaches us anything with the stories of Blockbuster, or Kodak, or whatever, is fundamentally, the thing that people hold onto most is their business models.

And when you’re not protecting a business model, when you’re not on the defensive, fundamentally, you’re on the offensive going into new territories and new markets and look seeking out new opportunities then you don’t protect your existing margin, you look to attack somebody else’s. So for me, actually, the biggest threat definitely within the US market right now is  FS bias that have a bigger balance sheet, or big non-FS digital bias who can actually start using brands and communities of people who, fundamentally, love what they do to really parlay that into a financial services experience.

At this stage, pretty much anybody can be a bank given the regulatory framework and, you know, abstracting those things through different players in the US market, and at that stage why would you not get into FS, why would you not do that and start tucking into some of those revenues.

Peter: Right, right, yeah, that makes sense. So, I want to just go back and talk about your Pulse product because I find it fascinating. You benchmarked…. always used a journey….you know, I was looking through your website seeing just about every financial services you can think of, and maybe just describe exactly what you did there and how you’re able to have like thousands and thousands of user journeys’ recorded.

David: Yeah, I mean the sort of piece that really puts a light on this is….I mean, banking is incredibly experiential these days. You know, it isn’t about a piece of paper that turns up on your doorstep. It’s, fundamentally, the service in which the financial services player creates. So for me, actually, the best way, whether you’re a designer, you’re a product person, you’re a strategist within the bank, the best way people can really understand how good they are is actually by understanding how good everybody else is around them, and not only in your geography, but, fundamentally, what those best in class look like.

And really what Pulse is set out to do is how can we give the name Pulse, how can we put the fingers of the industry on the Pulse, how can it really understand exactly what’s happening out there globally, whether it’s people in the US learning from what people are doing in China, or understanding really what the super apps do, you know, everybody has kind of heard of Alipay, but has anybody really ever seen their experiences.

In some instances, we’ve got people using Pulse internally to their organization to go and show their internal legal department that actually somebody has not only done the thing that they said wasn’t possible, but they’ve done it in our market and it’s really, really successful. So really, even as I say, given how experiential banking is today than really being able to put the insights of what your competitors are really doing in the market at your fingertips definitely shortens those cycles of creating good products internally in organizations, and it allows everybody to kind of step their game.

Peter: Right, right. And so then, how are you….. technically record many of these journeys from all over the world?

David: Obviously, with everything that we do…..I mean, community is a massive thing for us,11:FS, and actually if you look at all of the major hubs from a fintech perspective, we’ve got a really deep community that works with us to create the content that we need. So for us, it was a natural extension of the, as I say, the community side of everything that we sort of built out is really, really powerful.

So, being able to tap into that to generate benefit from them in terms of the financial side of things, in terms of what we can bring to them with that, then also sort of the import export model that we use to make sure that actually we can always have people who really have got their fingers on the Pulse when it comes to the industry and those changing areas because, you know, there are things changing weekly and we, within 72 hours, have a new piece of content apps working somewhere in far flung places like China, or anywhere in the world to make sure that the people who have Pulse are constantly looking at what’s best.

Peter: Okay, so let’s move on to Foundry which I find also very interesting that you’ve been able to……you’re not just a consulting firm, but you’re actually going and building things. And I’ve read that you’ve got this partnership with DNB which I think is Norway’s largest bank, but tell us a little bit about exactly what you’re trying to achieve here. Are you looking to displace the Jack Henrys and the (inaudible) of the world, or exactly what are you trying to achieve?

David: Yeah, I mean, Foundry, we didn’t really set out to…you know, this wasn’t our intention to build a core banking system and full tech architecture. We sort of got to a point where we sort of have to, I mean, after building out, you know, a few go-to-market propositions for people, inevitably, what turns to is a question over what the strategic platform is, and actually what is really needed and what is really required.

Our CTO, actually, at 11:FS used to be the CTO of an investment trading firm called Nutmeg in the UK, but before that actually a really large betting group called BetFast (?). Actually, you enjoy these points…. been used by how hard financial services is. You know, if you look at betting, he developed the in-play betting capability which, basically, will allow 100 million people watching the Super Bowl to get their odds updated to their mobile devices allowing them to make, you know, different bets, depending on which way they’ll win this betting.

Actually, if you can do that in real time and service that type of thing then the reality for a loan and a mortgage and a credit card is relatively straightforward. So, he matched what we’ve done with Foundry, you know, the bettors going into a number of different banks around the world and going …….if your aspiration is to create, you know, intelligent digital services, if you really want to deliver services and things that are fundamentally compelling in your market then the incumbent organizations that are providing these things are just not going to get you where you need to.

After drawing the same diagram for everybody, I mean, about 20 different times, after which we thought, you know what, let’s just go build this thing. So, we sort of started with an approach of….I mean, many people at that stage would have, you know, gone to get 40 Million pounds worth of VC money and sort of locked themselves in a basement for three years while they were sort of tinkering away. But, from our perspective, the only thing that really matters with new technology is that there is trust in that technology and that people are actually using it.

So to me, this wasn’t an exercise in us building what we felt always best. It was an exercise in actually building something that will really met an industry problem. So, doing that with a partner was way more beneficial to us than doing it in complete isolation. So, the partnerships…..you know, we spoke to a few different people, but really loved the DNB guys. You know, they were…. both the old CEO and actually, the new lady who’s just taken over, just so culturally aligns to the way in which we work and, actually have such a great aspiration for really where their organization could go.

Norway, as a country, is incredibly digitally savvy, the government has invested in some really, really good digital systems that you could integrate into as well, but really the plan with Foundry is to be in this situation where slice by slice we replace the existing technology and capability within their organization and as I sort of said from the get to, this is really about building a network of networks. I think with SaaS-based systems what you can allow to do and actually if you look at some of the incumbent players, this is really where they’ll come and start.

For everybody on the platform, the platform becomes cheaper. For everybody’s investment from a license perspective, your ability to develop the platform exponentially grows. And this is very different when you’re building SaaS-based systems than when you’re building systems that are built to certain data centers with 25/30 Million upgrade costs every two to three years. The world has just moved on so dramatically and whether it’s kind of base systems, whether it’s micro services architecture, whether it’s (inaudible) and Kafka, all of these things allow you to do things in a way that you fundamentally wouldn’t be able to do before.

Again, this is where, for me, fintech is being born in the digital age, rather than digitizing from a analogue past, or just setting a completely different standard in terms of what’s expected from a technology perspective.

Peter:  Right, right. So then, what parts….I mean, are you eventually going to be working with DNB to replace the entirety of their core banking infrastructure and where are you on that journey?

David: Absolutely. This is really about…for DNB, they’ve sort of publicly said this is really about cost efficiencies from their perspective. Doing it cheaper and doing it better is not a thing that is mutually exclusive, so if you can go from a full month product review and deployment process to being able to do that in 90 seconds then that’s a really good place from their perspective. We’ve started with unsecured credit, but we’ve quickly moved into credit cards and current accounts and being able to then improve the platform because what we’re trying to do is really reduce the complexity in these systems.

If you look at actually how many organizations has been created, they’ve been wildly successful for, you know, a couple of hundred years acquiring other customers, acquiring other competitors to a point where they’ve got such a wide array of multiple monoliths in their back office. This is really what leads to probably the most worrying thing if the CEO of a big bank which is (inaudible), you just can’t do anything about. You know, without major, major rationalization of the technology that sits within the back office of any of these organizations, they are quite simply never going to be able to compete with the new fintechs coming into the market.

We really have, you know, quite increases in innovators’ dilemma playing out in front of us over the next five years, but, you know, can the incumbents really understand innovation and technology quicker than the small, nimble startups in fintechs really attain any level of material scale. That’s the most exciting thing for us, we are taking the approaches of the mentalities and methodologies that fintech has brought about and deploying them against very large scale problems.

Peter: So then, what about the US market? Obviously, it’s the largest market in the world with maybe the exclusion of China, but certainly in the west it’s the largest market and maybe thousands and thousands of banks here…..many of them using infrastructure that was built in the 60’s and 70’s still. So, how are you approaching the US market and do you have clients like DNB already piloting your stuff here?

David: Absolutely, we do. We are building out something actually, retail capability right now that will go to market in Q2 this year. So, we will be sort of continuing to sort of expand now. I should say, Foundry very much is about the…..the state that we’re in is very much about the partnerships that we’re taking to build that out, so the network of networks for me. Each node in that network is about the partnership that we put in place to really sort of take it to market.

So, we’re in pretty advance discussions with a few people around the globe.  We essentially work in these partnerships to create geographical exclusivity for a period of time, but, definitely, there’s some really interesting conversations happening in Australia, there’s some really interesting conversations happening in the US, and, yeah, we’ll have some super interesting news to share about that.

Peter: Okay. So, the partnerships then, are you’re talking about partnering with other software companies because 160/180 people, like you said, to completely replace core banking infrastructure would be challenging. So, I imagine, that’s…..I mean, tell us exactly how it’s going to work where you’re not going to just create all the code yourself, it sounds like. Are you doing it with partnering with existing suppliers who already have existing (inaudible) in banks?

David: No, I mean, the partnerships that we sort of have in place are predominantly with big A1 financial services organizations. I think the reality of where we are today, I mean, we’re just over 180 people, you know, across all of these different divisions….you know, digital is fundamentally a small team sports. You know, the days of needing 5,000 people to do a thing have died and gone away, and this is really quite a difficult thing, I think, for many of the big incumbent organizations.

You know, if something is priced on time in materials then you would like it to take a lot of time and a lot of materials, if you have a lot of materials, right, So, being in that situation where fundamentally the world has shifted and it’s more about having the 15 to 20 people who are best at doing it, and, actually this is really what….if you look at any fintech player globally right now, you know, they are scaling up, but the areas in which they’re scaling up is predominantly not really the engineering side of things that gets really, really large.

It’s, actually in customer service and customer support, so, you know, even a player like Monzo now over in the UK has 4 to 5 million customers. The majority of their employees are customer service, their engineering practice has scaled, but not to the scale they’re actually a global bank, or more sort of legacy incumbent organization would have done. So, you know, fundamentally, digital is a small team sport, this is about having the best people rather than the most people.

From our perspective, actually, Foundry in itself is, what is it, 47 people, I think, within Foundry has been able to implement into a US organization, have built alongside it with all of the capability that we’re building with DNB and a third organization in the mix that we’re working with as well. So, again, it’s…..if you do these things right, if you approach them in the right way, if you have the right talent and you have the right culture then, you know, not only digital, but success is very much a small team sport.

Peter: So then, do you think….you know, there are some of these big banks, UK, US, you name it around the world….I mean, you’re talking thousands, tens of thousands, in some cases, of software engineers of these companies, are you saying that’s going away, the dinosaurs and in a decade, or two they will be the smaller number?

David: 100%, I mean, if you look at any….I mean, I would hope so, but equally bureaucracy and governance has a way of existing like you wouldn’t believe, right. So, if you look at any government office, actually, their level of bureaucracy and governance around processes, again, this sort of ossification around the thing that made them successful in the first place can often just make things a lot harder than they really need to be.

So, I think, very much what we…..I think that with the old incumbent organizations, their technology is very much led them to an operating model that expects everything to last forever and cost a lot of money. You know, most of the time the hardest thing that we have convincing people is that things don’t cost as much, or take as long as they really are expected to do and it’s an interesting one. It’s almost Stockholm syndrome in terms of….you know, surely we have to do about 5 million PowerPoint presentations, or surely we have to do six months of requirements gathering.

And, in reality, the world’s….when new technology dictates  that everything is difficult and everything takes a long time then, absolutely, you have to be absolutely categorically certain that the thing you’re doing, the change you’re making is right because it’d take you forever, it’d cost you a huge amount of money, and if you get it wrong, it’s really difficult to undo in a world where micro services architecture is in place and the impact that that can have, fundamentally, on your operating capability.

You know, you could implement continuous testing and continuous integration, your ability that you make a hundred deployments a day is not unheard of. You know, many of the challenger banks that are really focusing on operation efficiency can do a hundred deployments a day to life, they can run a current account less than 15 cents, rather than $200 like a kind of a major bank would do.

This is really where the difference is, if everything is a very, very small change, you can afford to be wrong. When everybody got all excited about “Fail Fast” culture, this is really what was meant. It wasn’t really about failing fast, it was about failing incredibly small and incredibly inexpensively, it’s just that it doesn’t sell books in the same way.

Peter: Right, right, got you. Okay, we’re almost out of time, but before I let you go, a couple of more things. You know, we’ve touched on the podcast, so I want to touch the video that you guys did late last year which I thought was excellent and….why did you produce the video? On this video, for people who hasn’t seen it, I’ll link it in the show notes minutes. I mean, it’s a professional video, you didn’t just do this on iPhone whatever, so talk about the video, the history of fintech and 11:YEARS, that sort of thing.

David: Yeah, sure. So, I mean, community is really big for us, we’re very, very proud of being part of the community where…..actually, really, really proud of what has happened, particularly here in London. You know, since the financial crisis, the people in place, either it’s in the government, or the regulator, or the Bank of England, have actually done a pretty phenomenal job to create the ecosystem in which we operate today. You know, many of the fintechs globally, actually, wouldn’t have existed without some really bold moves to create the regulatory set-up that we have in the UK with the PRA and the FCA.

They’ve actually created a competition mandate for the FCA which led to fintech really being a bang. You know, it’s been emulated now in Hong Kong, in Singapore, even into the Emirates, over into the US, Australia, all over the world. For us, many of the people who were really part of that story haven’t been told before, they haven’t had that light shine on them to really highlight to a global audience the great work they did to allow everybody in the ecosystem of fintech to do what they do today.

So for us, it was about shining light on the community, it was very much like we do with the podcast, we’re very, very lucky to have super, super interesting conversations with people and really we want to do with the podcast, or the video, or anything in that direction is….just want the people to hear that stuff. The more people who can hear interesting conversations, or can expand their horizons, the better the whole community will be.

So, that’s what we’re really, really set out to do, but, yeah, if you’re interested, it’s over on 11:YEARS.film, you can watch the whole thing for free. I think we’ve had about 500,000 people who’ve watched it now which is pretty impressive for an hour long bit of content. We’ve had CEOs from Monzo, Revolut, Starling, even people from Barack Obama’s administration flew over to take part and talk about really what happened to the point that the administration was really trying to do with the crisis. So, yeah, go over to the website, check that site.

Peter: Yeah, highly recommend it. It was far better than I expected when I started watching it, it was really well done. So, anyway, last question then, you know, we’re recording this in mid-February of 2020, what’s on tap for 11:FS for the rest of this year?

David: I run the company very much like a sports team, so the things that I’m always most excited about are the big summer signings (Peter laughs). We have some really amazing talents inbounds, we have some ridiculous talent already in the organization, whether it’s Leda, or Jason, or Sam over in the US, or Simon here in the UK as well, but there are two, or three people who are inbounds right now who I’m really, really excited by.

Every time we bring somebody in, it brings new opportunity to the organization to do something different and the people coming are no different to that. So, yeah, look out for those summer signings very shortly.

Peter: Okay, we will be on the lookout for that. Well, David, we’ll have to leave it there, I very much appreciate your coming on the show today.

David: No problem at all, thank you very much for having me.

Peter: Okay, see you.

Well, David looks forward to very interesting ideas there that digitally is a small team sport and that you don’t need tens of thousands of software engineers to create something. So, it’s going to be very interesting to see how big banks adapt….really, this is the decade where it’s all going to change, I think. I think it’s fine that technology in financial services is going to look extremely different by the end of the decade and I think David’s vision is one that I agree with and feel like it’s inevitable in some ways that you’re going to see some very large incumbents that really have a very different look and feel by the end of the decade.

We talked about Goldman Sachs, but there’s many others out there that are recognizing that they need to change fundamentally. I think that’s what David’s getting at. It’s not just about putting in some new software, it’s about fundamentally re-thinking how the business operates.

Anyway on that note, I will sign off. I very much appreciate you listening and I’ll see you next time. Bye.

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