London Fintech Podcast
00:13:03 · Tony Clark
[00:13:03] S2: Yes, exactly. Which comes to the advantage of having a background in it. So originally the idea was that Fintech would do one thing really simply. So you know, foreign exchange or peer to peer or something like that. And everybody swore that's all they would ever do. But of course, as time goes by, things change. And the example that sticks in my mind at the moment is SoFi in The States who started with student loans. They've just raised a typical American fashion 500,000,000 US dollars, which is quite a lot of money. And roughly speaking, they seem to want to do everything for everybody. Actually And $500,000,000 probably gives you a chance of doing that. On a more modest scale than raising 500,000,000, you guys have raised some money. And you started by doing one thing, as you say, but then you're adding things on the side. So the brand started like that and we'll come back to the software side of it but then the brand has changed in terms that if you go to iPhone, iTunes, whatever the Apple thing is or Google Play, you can tell which one I am, you can download it and try it for yourself. And you add more and more services. So how does that go from a brand perspective? Because one day people are saying, oh Revolut, yes, they give great interbank rates, you've to go there and do your FX, to another day, oh yeah, do a current account and they do lending or whatever. Services do you offer at the moment if someone downloads you today and signs up with you?
00:14:18 · Nik Storonsky, Tony Clark
[00:14:18] S0: So yeah, as you mentioned, we first started with just a plastic card plus the ability to exchange money, right? So later we had a services such as cross border transfers. Now you can also borrow money with us. You will be able to buy insurance. You are now able to set yourself current account as well within three minutes. So already it is that all these features, they're not coming from us, but they are more based on requests from our customers, right? So all the time we're getting, you know, customer requests and then we effectively know that, you know, majority of customers they want to have, you know, current accounts. Some people want to have the ability to borrow money and roll it up. And then we simply build it and iterate and effectively fulfill the demand that we have. [00:14:58] S2: Which is the best kind of course, which is that you know that something is going to sell. You don't sort of sit in your little cubicle thinking, I've got a really good idea. And you work on it for six months and find out that it may be a good idea but nobody wants to buy it. [00:15:09] S0: Yeah, exactly.
00:15:09 · Nik Storonsky, Tony Clark
[00:15:09] S0: Yeah, exactly. [00:15:10] S2: It's demand driven. Now one of the problems we've had on a brand perspective is in the sense what to call yourself. And one of the things that Tom Blomfeld was saying at Monzo was one of his reasons for taking a banking license was it makes it much simpler speaking to journalists and customers than that because when you say 'we're a bank' they think oh yeah, we know what that is' and then he explains how he's a slightly different bank, we'll come to regulation in a minute. So you're not going down the banking route. As I say there's this awful phrase e money issuer or whatever it's called where if you told me what and you said oh we're an e money issuer I'd have to scratch my head and the average person in the city may not have So heard of I think I did use a phrase from your website global money app which I quite liked but how do you describe yourselves? If I say what do you do? What do you do? [00:15:55] S0: Well, we provide the financial services that banks don't provide as simple as that, right? We provide it at better price with a better user interface. [00:16:05] S2: So it's personal financial services? [00:16:07] S0: Yeah. I mean, for example, if you look at Amazon, like, I don't know, twenty years ago, they just started from selling books, right, online. And then they later expanded into tons of more. So what is Amazon?
00:16:07 · Nik Storonsky, Tony Clark
[00:16:07] S0: Yeah. I mean, for example, if you look at Amazon, like, I don't know, twenty years ago, they just started from selling books, right, online. And then they later expanded into tons of more. So what is Amazon? [00:16:16] S2: It's like a shop, right? Yes. And interestingly, shows I'm wrong on everything. I thought no, no, Amazon can't expand out of books because they do books. Mean how can they do other things? Now I buy most of my Christmas shopping through them. So from that perspective then you don't seem to find the brand development challenging from a sort of descriptive perspective because actually your customers are asking you for these things. So from a different perspective, on the software side, one day you've built this nice simple little app that does one thing and then you add another thing on the side and you add another thing on the side and another side and then before you know it your nice simple clean software has grown into a huge bloatware with thousands of modules and 58 home pages and all that kind of stuff and it's almost like building an inverted pyramid. You started with something small and you put something big on it. So how do you cope with it from a software perspective about re engineering the development? At some point presumably you go, okay, we built all this based on that, but maybe we should just re engineer the whole thing?
00:17:14 · Nik Storonsky
[00:17:14] S0: Yeah, mean, there is a whole science, you know, how to get it done, we're kind of very rigid that following certain principles. So first of all, everything that we build is based on modular principles, right? So every piece that we're building should be like separate, like separate block, separate modular, separate code, right? And Whenever we want to build something bigger, we simply are not building it from scratch. We're just taking all these small blocks, we're combining them together. And here is a feature, right, that allows us to iterate much faster, build things much faster without any bugs. Same applies in app interface as well. So if you look at the whole app interface, it consists of very, very small, unique blocks, right, of design guidelines. So we apply the same blocks for all the products that we have: credit, premium, insurance, wealth, money transfer, FX. It's all the same, underlying is the same, We're just constructing something different from the same blocks. That's the key.
00:18:13 · Tony Clark
[00:18:13] S2: It's interesting because I was thinking about a million years ago, about thirty five years ago, when I had to do a dissertation at college. My degree and my dissertation was a nightmare. I got completely dropped in the deep end and I ended up working all of Easter which was amazing in those days. We were recording this the day after Easter now. And my dissertation was porting a Modular two compiler from the VAX to the IBM three seventy, which was big main fame at the time. Modular two was the first modular language. It was a development out of Pascal. This is in the early '80s. It's the kind of thing that people wouldn't do these days. I had a printout which was one inch thick. There was not one comment in the whole code, there was not one description and it was just a nightmare to sort of read through it. So I have direct experience myself of what this modular code stuff is like which is in the old days amounted to on my room in college. Over Easter I just couldn't understand this so I just ripped up all the printout into the modules and I put them on the floor and I could see like the 50 modules spread out over the floor so I understand that. Mean the technical challenge there of course is that it makes it easier as you say but you can end up having trouble on the interfaces. So if you've got interfaces, know for the sake of argument defined on 15 parameters or exporting or importing or however it works these days and you've got a whole idea of products. But then as you say, mentioned insurance, one day you introduce insurance which has got different parameters and a different kind of perspective of the world.