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a16z Podcast | The Future of Money and Monetization
11 segments available
Technology companies are running hard at almost every part of the traditional banking business -- from raising funds to moving money from one person to another. And as you would expect, that has meant change, both in terms of the banking services that are available to all of us, and the pricing of those services. It begs the question of what role banks play going forward, and whether tech companies are partners or competitors (or some combination) to the players in the traditional banking business? And finally, if banking gets unbundled by tech –- if there is a choice of services -- what fees, and at what price will consumers be willing to pay? a16z’s Alex Rampell leads a discussion with TransferWise Executive Founder Kristo Käärmann and Tilt founder and CEO James Beshara on the future of money and monetization. The discussion occurred as part of the firm’s U.K. Tech Summit.
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The Changing Landscape of Banking
In this segment, the hosts introduce the podcast's theme: the evolving role of technology companies in the banking sector. They discuss how tech firms are challenging traditional banking practices, raising questions about the future of banking services, pricing, and the relationship between banks and tech companies.
"welcome to the a 16z podcast I'm Michael Copeland technology companies are running hard at almost every part of the traditional banking business from raising funds to moving money from one person to a..."
Navigating Regulation in Fintech
Alex Rampell and Kristo Käärmann delve into the complexities of regulation in the fintech space. They compare the regulatory challenges faced by companies like TransferWise to those of Uber and Airbnb, emphasizing the importance of compliance in the financial sector and the consequences of ignoring established laws.
"and Christo start things off so one thing just given that the topic is the future of money how do you think about regulation because one thing that I find very interesting is that how did Airbnb an ub..."
The Importance of Compliance
Kristo Käärmann shares his experience with regulatory compliance at TransferWise, highlighting the necessity of obtaining licenses in various countries. He discusses how a strong compliance framework can differentiate fintech companies in a competitive landscape and the challenges of navigating outdated regulations.
"we took the way unlike uber or Airbnb to be a fully licensed money service in the UK before we even before we even got started and now we have a big team not just doing everything that the banks do fo..."
Customer Acquisition Strategies
The conversation shifts to customer acquisition strategies in the fintech industry. Käärmann explains how TransferWise educates consumers about hidden fees in traditional banking, emphasizing the importance of transparency in pricing to attract and retain customers.
"regulation question a little bit so I honestly believe that in a regulation is not bad if you if you look into this and we're dealing with money so there should be consumer protection and we all want ..."
The User Experience Challenge
Käärmann discusses the challenges of creating user-friendly financial applications. He notes that many developers shy away from fintech due to regulatory hurdles, but emphasizes that those who succeed in navigating these challenges can create valuable solutions for consumers.
"pricing model that has evolved where we decide not to show the real price of a service and then we hide it either into the interchange or into the exchange rate and then the consumer doesn't really ha..."
Evolving Banking Relationships
The panelists explore the evolving relationship between fintech companies and traditional banks. They discuss how some banks are adapting to the changing landscape by partnering with fintech firms rather than competing directly, highlighting the need for banks to recognize their role in a rapidly changing financial ecosystem.
"word-of-mouth a really really strong word-of-mouth where the fastest-growing app on college campuses in the US and I think it's because dealing with money there's just there not many great well-design..."
Lessons from Amazon's Evolution
James Beshara draws parallels between fintech and Amazon's evolution from a bookstore to a tech giant. He suggests that banks could leverage their existing infrastructure to innovate and provide new services, similar to how Amazon transformed its business model.
"answer but what I see from say uber and things seem to happen faster than we then we think and and then the next question is you know what should the what should the banks do and I think the smartest ..."
The Future of Payment Processing
The discussion shifts to the future of payment processing and the potential for disruption in the credit card industry. The panelists debate the implications of high interchange fees and explore alternative payment models that could benefit consumers and merchants alike.
"the - the banks out there in the audience I would second what Chris is saying recommend tilt to every one of your customers that would be great but I think it more more poignant Lee I'll tell you a st..."
The Cost of Payments
The panelists discuss the hidden costs associated with payment processing and how these fees impact consumers. They explore the potential for new payment models that could reduce costs and improve the overall payment experience for users.
"almost saying an API for banking and you know part of the problem like at least in the u.s. there's been one new bank charter granted in the last five and a half years and it was an Amish bank no exag..."
The Role of Advertising in Banking
The conversation concludes with a discussion on the potential for advertising-driven banking models. The panelists consider how banks might leverage consumer attention to create new revenue streams and enhance customer engagement.
"motivate here because I know that you are of the opposite opinion because I agree with James totally but you're you know you don't think that it will go on to the trick you know I mean it's that the p..."
Innovating Beyond Transaction Fees
The final segment focuses on the need for banks and fintech companies to innovate beyond traditional transaction fees. The panelists discuss the importance of providing genuine value to consumers and explore how advertising and partnerships could reshape the financial landscape.
"being a VC of seeing so many different people trying in different angles and then taking it back to which one's gonna go through I personally raised my hand I don't know I know it's gonna get there bu..."