Kids creating the future bank | Chris Skinner | TEDxAthens

[Music] 25 years ago Bill Gates said we need banking but we don't need banks anymore Bill Gates was wrong since she made that statement the big banks have got bigger with more market share more assets and more customers than ever before and I think it's because Bill Gates 25 years ago was a little bit naive and didn't really understand how banking works we don't need banks to borrow money we don't need banks to make payments we don't need banks to do savings or investments but we need banks to store money with trust and that's where the rubber hits the road in banking because banks have decades of regulation and that regulation makes them a very integral part of every country's economy they're backed by governments they guarantee not to lose our money they have five times more regulation on average than the typical technology company they're the most regulated industry in the world and yes they mess up sometimes and yes they are not liked but they guarantee our money the biggest weakness of banks right now is that they were built for the Industrial Revolution they were built around paper around checks around cash around pass books around Ledger's and those things are of the last century and they need to completely change their business to be digital because when you deal with a business model that focuses on the physical distribution of paper in a localized network of buildings and humans it doesn't make sense when we live in a world of the digital distribution of data in a globalized network focused on software and servers and that's why there's been this massive rise of a new industry called FinTech integrating finance with technology rather than finance versus technology it's starting to come together to integrate because money is just data these days in fin tech community has seen massive investments last year alone 111 point eight billion dollars in in FinTech startup companies more than twice the amount of the year before and this has been building for over a decade so we've seen thousands of startup companies doing interesting things around financial services that are very specialized around payments borrowing saving and investing and what's interesting is that the breakout companies that are unicorns are founded by people who are really young typically Gen Y or Gen X under the age of 40 Gen Z T of teenagers are even creating new organizations and new ideas around financial services because they can because they can code because they don't like the system as it is they want to change the system with technology and they are the new systems being built on the platforms designed by teenagers and kids that's the world we live in today as some of these people are even former bankers nicolai who found a revolute one of Europe's breakout unicorns was working for Lehman Brothers in September 2008 when the old financial system collapsed he's building the new financial system as are these guys John and Patrick Collinson two brothers from Ireland who started a business called stripe in 2010 when they were 21 and 19 years old they now run one of the biggest fin tech unicorns in the world valued at nine point two billion dollars in October 2016 and more than doubling in value such that in October 2018 they're valued at twenty billion dollars not bad for a couple of kids what strikes me as I talk about this is a lot of the financial system that I've dealt with all my life is run by people like Jamie Dimon they're not kids they're my generation slightly gray slightly wrinkled and he's running an organization that has tuned in 35,000 people valued at two hundred forty five billion dollars in October 2016 when this fledgling five year old company strike was valued at nine point two billion dollars with four hundred people so strikes generating more than two times more value per person than JPMorgan Chase and Jamie Dimon said look we can't let Silicon Valley eat our lunch and so he's reorganized the whole of that Bank to be more like a technology company investing in FinTech startups building their own FinTech campus automating everything that can be automated across their business which is the reason why a third of their people disappeared in two years and their value increased by 50% they're using artificial intelligence distributed ledger systems machine learning apps and api's and open banking all the technologies that can digitalize financial services are being deployed within this institution and the results can be quite stunning so for example in one second JPMorgan can process analytics that historically took 360,000 hours of legal time there's 1,500 lawyers sacked right there which may be a good thing they're spending 11 billion dollars on technology a year two years of JP Morgan's IT budget is the whole of the amount invested in fin tech in Europe they used to spend 20% on innovation they now spend 30% on innovation three billion dollars a year and that will probably increase to 50% in the next few years five or six billion dollars a year on innovation they have more developers than Facebook and Twitter combined I'm not saying that's a good thing 50,000 developers and technologists in a hundred and sixty five thousand employee Bank but that's why it is the technology company that does banking and it's changing its model is structured to be digital because they don't want to be disrupted by the FinTech community they want to be the disrupter and that's a big attitude change and to be a disruptor as a bank when you have two hundred and twenty years old you have to change the mindset of the bank in fact I think of FinTech as being the marriage of the parent-child relationship financial services is the parent that wants resilience stability security and technologies the child that wants to challenge everything and argue everything and change the future and design a whole new world and that's why a lot of the FinTech startups have as their cultural values doing good for society with technology doing good for the planet with technology because their Gen Y and Gen Zed now i spent a long time where i didn't have any children because i was denied children I was a child denier I now have two little boys Eddie and Freddy a three years old thank you thank you I love them to pieces and they had their third birthday at the end of March and the twins but I spent years thinking I'll never have kids because I Stan I'd the opportunity of having children and all those years I actually justified it because I thought to myself why would I want to bring kids into this world that's screwed that's morally bankrupt that has governments and corporations messing up this planet and doing things for their own lining of their own pockets rather than for the future in fact the culture I grew up in is where greed is good I'm here for my bonus I'm here for my wallet I'm not here for you I'm here for me greed is good it's not good because with great power comes great responsibility and that's what banks have great power and have they've been responsible for their actions are they accountable for their actions I think they should be and I don't think they are it's stun glue the other day to read that since 1988 just 100 companies have been destroying our planet 71% of greenhouse gas emissions comes from just 100 companies since 1988 over half comes from just 25 companies the fossil fuel companies the shells of BP's the Exxon Mobil if the banks stop supporting these companies we could change planet Earth almost overnight because these companies would go bust but the banks fund them finance and support them because they're making a buck and some kids don't agree with this our children don't agree with this I don't agree with this Gretchen Berg doesn't agree with this some decision-makers have known exactly what priceless values they've been sacrificing to line their own pockets to make unimaginable amounts of money we can't continue to do that if we are to survive because this planet has a short clock a short window now the good news is that there are some things happening with technology and finance that is doing good for society and good for planet Earth these are cultural values that sit at the backbone of many of these fresh young startups because they're being started up by Gen Z and Gen Y individuals who want to make a change technology can change the planet technology can change the world they're reaching parts of the world that were historically unreachable there's lots of FinTech startups who are looking at how can we provide financial literacy to our children kids aren't taught anything about money in school but they should be as that's what controls our lives when you come out of school the mentally ill are often the ones that have the worst financial problems they have the worst addictions they may gamble or have alcoholism or drug addictions Harry can solve that is to look at their spending patterns and support them provide financial wellness to create mental wellness and there's lots of FinTech startups focused on financial wellness our parents my grandparents are the most vulnerable in society to criminals and scammers can we help them to make them less vulnerable of course we can but the bank's never used to do any of this because it wasn't worth it it's not profitable in fact Financial Inclusion is one of the biggest growth areas in FinTech where historically it's not been worth banking four and a half billion people in a planet earth because it's just not going to make a profit yet Digital Inclusion can reach every single human on earth if you have a mobile phone of which most of us do a super mobile phone you can trade transact and talk and get opportunity and this has been proven over and over again by people worldwide my favorite example is Vijay Chaka Sharma he's a billionaire out of India which I guess that's why he looks so happy he runs the company called Paytm it's one of the biggest mobile financial operators in India with over 300 million users if you go anywhere in India you can use peytie and mobile wallets using QR codes I was in Bangalore recently and went to a temple and literally the temple said give charity money to us either in cash or using pay Tian his mobile financial system the reason why it's my favorite story is not because Vijay's had been there but because 10 years ago he was homeless he's 40 years old when he was 30 was bankrupted by his friends and not his friends anymore he was literally sofa surfing and to get a job interview he had to work out whether to have lunch that day and walked the job interview or take the bus and not have anything to eat it was literally as stark as that and yet today is one of India's youngest multi-billionaires running a mobile financial technology system called Paytm now his story is really interesting because he was inspired by Jack Ma the founder of Alibaba and China and Alibaba you may well know is one of the amazing success stories of a big tech giant coming out of the Chinese country in fact what's interesting for me is nearly all of the vision around technologies coming out of Asia and Africa and South America it's not coming out of Europe and America and a lot of that's because Europe and America is running on legacy infrastructure whereas China's created a whole new infrastructure in fact Jack Mars company Alibaba launched a payment system called a Leo paid which is one of the most successful financial services in the world it doesn't just allow you to pay for things you can save invest and borrow and you can borrow for 24 hours you don't have to borrow it for a year we only have borrowing for a year because of the old financial model of distributing paper through branches now digitally you can borrow for as long as you need it what's amazing about these numbers this is the mobile payments in China with WeChat pay and Ally pay who two combined have 80% of the market and over half of that is with ally pay is that last year two hundred and seventy seven trillion Hwan was paid for through QR codes and mobile phones in China that's 41 trillion US dollars forty one trillion US dollars you compare that to the USA where they transacted around two hundred billion dollars on mobile payments last year and you can see the scale of difference in fact most of China is now cashless in the big cities for that reason but one of the things you may not know is that within this phenomenal success story of alleyway and Alibaba and this amazing amount of money being transacted through mobile phones in only pay about two hundred fifty six thousand transactions per second if visa processes about two thousand transactions a second these guys are scaling massively across all of China and in fact cross all over the world because they're the power behind Paytm jack mar invested in Vijay but the story I love the best is that one individual in a leap a three years ago had a little idea I thought can we change people's behaviors to be greener to behave more sustainably and so they created the game in the payment system where every time you pay for something it monitors how green your behaviors are if you drive to work and use the gas station you get zero points if you take the bus you get five points if you walk or cycle to work you get 10 points and what a points make trees the games all about getting points to plant a virtual tree but what actually happens is that when you get enough points to plant a virtual tree a leap a Alibaba plant a tree in real life on your behalf and they have 500 million people playing this game for 800 million people planting virtual trees has resulted in 100 million real trees being planted in China in the most arid areas of Outer Mongolia and the deserts and it's covering a thousand square kilometres which by all estimates by the end of next year should reduce China's carbon emissions by five percent from one little idea from one person working for a financial company I think that's where the future really ends in or starts which is little ideas from people can make massive differences and those ideas can come from technology doing good for the planet and good for society and good for financial services rather than keeping it as greed is good because I want my kids to have a future I'm sure you do too and this is the way in which I think we'll achieve it thank you [Applause] [Music]

Channel: TEDx Talks

Views: 43,033

Keywords: TEDxTalks, English, Business, Finance, Future, Technology

Id: YzmvQ2vVe1s

Length: 16min 51sec (1011 seconds)

Published: Thu Jul 18 2019