Wharton FinTech Podcast
00:31:46 · Yoonkee Sull
[00:31:46] S2: Yeah. I I I actually think this is where a lot of value has actually been created personally, and and I think a lot of it was also done with just, you know, disruptive business models as well. So, you know, maybe a couple examples I might point to, you know, Chime is a good example of a company that's offering a fee free checking account with no minimum fees or overdraft fees. Or Monzo, which we talked about, another portfolio company that has done really well in The UK by bringing transparency to customer and accessibility, or Robinhood for being the first to offer commission free trading, or another one of our companies and wealth altruists in terms of arming advisers with tools to ensure that they can serve clients with with with any size of net worth. And so I think a number of others... There are a number of others where I think the early core value proposition was about, you know, removing hidden fees, allowing people to access products that they otherwise could not have, you know, had access to, and ultimately delivering the savings to the customer and building a fantastic business alongside that. So I do actually think a lot of great FinTech businesses have kind of delivered against this and are continuing to deliver for it.
00:33:11 · Sabrina Fathi
[00:33:11] S0: You've mentioned some of the new banks that, you know, have have risen in popularity like Chime and Monzo, and it seems like that sector is quite well established, but maybe some other FinTech sectors still need disruption. We mentioned earlier, Coast, which is the fleet payment solution and how fragmented, that that space can be. Are there any other spaces within FinTech that you believe are right for disruption or, that could use technological advancement and innovation to grow even further?
00:33:44 · Yoonkee Sull, Wesley Aster
[00:33:44] S2: Yeah. I think, you know, I think one high level dynamic we discussed a fair bit is that there's, you know, there's definitely been a lot of innovation for consumers over the last decade, a little bit to your point. I I I still do think that we are in the early innings of the growth headroom there even even today, but we are now seeing similar impacts in companies emerging in B2B, you know, companies that are just providing better technology and financial technology to, you know, small businesses, to advisors, to others, you know, like that. And so I I think, you know, after a lot of innovation on the consumer side, I think we're seeing a lot of this... A lot of similar themes get replicated on the b to b side, and I think we're still very early early in that. I also think that there is a lot of opportunity in terms of, you know, you know, financial software businesses, whether it be on the accounting side or the planning side or the treasury side to increasingly, you know, leverage AI to further automate, create efficiencies, and things of that nature for for the customers that they serve as well. And I think we're we're we're, you know, we're seeing really interesting trends there. And then I think more macro, [00:35:07] S1: you know, I think there's
00:35:07 · Wesley Aster, Yoonkee Sull
[00:35:07] S1: you know, I think there's [00:35:08] S2: a lot of discussion around the existing rails needing to be disrupted to support even further innovation. And I think it's a complicated and a nuanced subject, but I do think there are going to be interesting things that emerge, you know, out of those themes as well over the coming decade plus that we will be, you know, keenly keenly watching as well. [00:35:37] S1: So related to disruptions or or perhaps opportunities within fintech, we'd love to hear your perspectives on the technologies that are shaping the future of fintech. One that you mentioned a couple of times is AI. AI is transforming financial services from from underwriting to fraud detection. Where do you see the biggest opportunities for AI within FinTech?
00:36:01 · Yoonkee Sull
[00:36:01] S2: You know, first, I think there's a lot of opportunities in terms of just adopting AI internally, and so, you know, FinTech, you know, one of the things that we've talked about here is, you know, FinTech businesses certainly do have an advantage over incumbents in terms of efficiencies, and this is just another huge lever that I think FinTech businesses can, you know, further further take advantage of. You know, this certainly touches, you know, some of the examples that you you mentioned in terms of underwriting to fraud, you know, to risk. I think these are these are certain... You know? And, of course, we're seeing a lot of activity on the support side. And so I think I think the applications here are quite expansive, and I think FinTech businesses are really in a strong position to take advantage of that. And then there's a lot of innovation that is going to happen on the customer facing side in terms of, you know, providing more productivity tools, more automation, just using AI to make people's lives easier and make your tool easier to use. I also think personalization is a huge opportunity in terms of leveraging AI to better affect that. Embedded in that could be things around financial advice even eventually in the future. And so I think the potential is really, really massive, and the exciting thing is we're still at the very beginning of it. The other exciting thing is even if you were a FinTech business that got started ten, fifteen years ago, you have every right and every opportunity to take advantage of these advancements in technology to embed them further in your own operations or in adding value to your customers, and so I think we're really excited about, you know, this across the board, both as it relates to new investments that we might make in addition to the opportunities it presents for our portfolio companies.
00:38:03 · Wesley Aster
[00:38:03] S1: Yeah. And you mentioned personalization. A thought that I've had is that, you know, typically, perhaps even outside of just fintech, I feel that there's, like, a trade off between personalization and standardization in the sense that personalization isn't always scalable, and that perhaps AI is a way that, you know, you can make that a bit more scalable and unlock a lot of opportunities that haven't been... That haven't existed in the past.