Fintech Insider Podcast by 11:FS
00:05:54 · Merusha Naidu
[00:05:54] S3: Yeah. Absolutely. I think traditionally, banks have benefited from customer inertia. Right? You know, banks set their rate, and they just... Customers have to accept it. And I think it's it's two... Twofold. The first one is the banks don't give customers enough options so that they can actually pick and choose. They're quite prescriptive. Well, you know, traditionally. Right? And I think... But I also think at the same time, we can't just say, look. It's, you know, customers making poor financial decisions. I think it really comes down to what are the needs of the customer and how big of a pain point is for a customer to actually think about, you know, moving. Right? And in the past, even looking for other providers, that was typically very, very difficult. That's where AI agents come in because, you know, even if I look at, you know, some of our customers, they kinda say, okay. Well, I'll take this price because I understand it. It's easy, and it kind of makes sense. They don't have the tools to look for competing products, competing banking services, competing rates. With AI agents, this now makes it a lot easier. So do I think that the traditional banking rails are gonna still be able to rely on, you know, passive customers? Definitely not. The banks are now going to need to really compete for the first time with these newer digital players that are coming in. They're gonna need to make sure that they are, you know, relooking at their commercial models to retain their customers. So I think that's one of the biggest shifts that we're gonna see. And I think, ultimately, a bank's loyalty or their customer loyalty is going to need to be continuous. They're gonna continuously need to show customers their value.
00:07:36 · Ross Gallagher
[00:07:36] S1: And, Merusha, it's a... Because it's a really interesting point. Right? I I agree with you. I mean, there's no world where this doesn't force banks to become more competitive. But it's interesting, isn't it, when you start to think about sort of the... Some of the decisioning when it comes to those agents. Is there also a risk that actually banks become a little bit more commoditized and actually it does just become about who's offering the best rate?
00:08:00 · Merusha Naidu
[00:08:00] S3: So in in certain products, I would say. So if it is very easy transaction banking, then customers... It's very easy for customers to look for the best rate, the best solution. What we're seeing happen now is when you have the likes of a Revolut entering the market. Right? And we're seeing this happen across all of our regions. Right? When you see the likes of a Revolut entering or when you see a large digital bank coming in where they also have, you know, AI capabilities or AI agents to help with the the, you know, optimization of of the way these banks operate. I think one of the things that we are seeing is banks are now saying, look. They need to... Even from from processes like us, they really need to look at their commercials because they... Their bottom line is really being put under pressure. And so we are seeing that that is is a continuous problem when it comes to some of the more traditional banks. We're seeing very large banks across Africa, across LAC, even across The Middle East who are now saying to us, okay. We used to do this before. We've had relationships of over twenty years. We now need to relook at our commercials at a product level for every single service that we're offering because, you know, they they need to just be more competitive. They need to offer better services to customers even when it comes to, you know, sharing interchange, giving better interest rates, all of those different things where it would typically just be a revenue driver for the bank than now having to share in that revenue. So it's becoming quite quite challenging for banks who are not, you know, making the change and who are not evolving.
00:09:40 · Ross Gallagher
[00:09:40] S1: Aurelien, how how much do you think that, you know, those deposits becoming less sticky and then I suppose by definition, less stable? How much does that start to undermine some of the traditional banking model?
00:09:55 · Aurélien Bonnel
[00:09:55] S4: A great deal. Firstly, I wanna kind of challenge what Conrad said and that, you know, it might be a slow uptake and it hasn't yet come to fruition, right? We are seeing our clients use MCP all the time, use more context protocol, they use their agents to trigger money movements. It's happening and it's not always the most shiny or flashy companies that do it. The beauty of AI is that anyone that pays for a commercial model with AI has the opportunity to be technically more advanced. And so even companies that you consider older are able to do it and reap the benefits from it. So the deposits are less sticky already, that is the case. It fundamentally changes the way a bank has to think about the deposits. They're no longer free to use for a ten year mortgage across town, right? We basically break the illusion that a deposit is there in your account and also available for lending. So banks have to think very candidly about standing up a model that they can monetize the utility of the bank rather than just making money off the deposits. We think at N3xt, we are a narrow bank, we don't lend. We think there will be two banks in the future. The ones that are full utility play that do not lend and just offer 20 fourseven money movements with deposits that are safe and sound always and available. And there will be specialized institutions that provide specialized credits, specialized lending for the highly complex cases. Both of them need to be monetized independently and no longer as one bundle. And that will change the costs to every customer of the bank.
00:11:47 · Ross Gallagher
[00:11:47] S1: Yeah, I mean, and I think, you know, what you are describing is fundamental redesign of, you know, how we've understood banking to work. Aurelien, if I go back, I suppose to the question that I posed then to Merusha about some of this sort of spotlighting that, uncomfortable truth around the incentives for the banks and the incentives for the customers not necessarily always being aligned in terms of outcomes, do you think that then this fundamental redesign that you're talking about starts to change that? Like is this a better world for customers?