London Fintech Podcast
00:19:47 · Nik Storonsky, Tony Clark
[00:19:47] S0: Well, you know how many services you can have, like Facebook, Twitter, you can also pay with WeChat, you can invest money with WeChat, you can buy yourself insurance with WeChat, right? And that's just huge. But the whole point why everyone is using it, because the interface is so simple, right? So they managed to create interface which effectively covers everything, right? So it is doable, it is possible. [00:20:07] S2: So the software problems, surprisingly enough, have been sorted out over the last thirty five years that we're still in the teething stage at the early stage. And I think there's more art than maybe what you're implying and more skill than maybe what you're implying in terms of keeping a nice simple user interface. Just take a simple example, if you go back to the earliest spreadsheets or actually not the earliest word processors the earliest word processors were awful like VI but go back to early versions of Excel it's actually relatively straightforward and then as time goes by and more and more features are added it gets more and more complicated and occasionally Microsoft does sort of rejig the design and you know my children sort of laugh at me and say oh you're using an old fashioned version, it's just simpler to use than their version. So there is quite a lot of art and quite a lot of skill in keeping it nice and usable especially on quite a small real estate which is a phone screen.
00:20:07 · Tony Clark, Nik Storonsky
[00:20:07] S2: So the software problems, surprisingly enough, have been sorted out over the last thirty five years that we're still in the teething stage at the early stage. And I think there's more art than maybe what you're implying and more skill than maybe what you're implying in terms of keeping a nice simple user interface. Just take a simple example, if you go back to the earliest spreadsheets or actually not the earliest word processors the earliest word processors were awful like VI but go back to early versions of Excel it's actually relatively straightforward and then as time goes by and more and more features are added it gets more and more complicated and occasionally Microsoft does sort of rejig the design and you know my children sort of laugh at me and say oh you're using an old fashioned version, it's just simpler to use than their version. So there is quite a lot of art and quite a lot of skill in keeping it nice and usable especially on quite a small real estate which is a phone screen. [00:20:56] S0: We for example have six designers, right, you know, working on this problem, how to make sure we package, you know, all these features, all these products, and still, like, you know, very simple interface. It's a difficult problem, right, but I mean, it's solvable.
00:20:56 · Nik Storonsky, Tony Clark
[00:20:56] S0: We for example have six designers, right, you know, working on this problem, how to make sure we package, you know, all these features, all these products, and still, like, you know, very simple interface. It's a difficult problem, right, but I mean, it's solvable. [00:21:09] S2: Yes, and the proof of the pudding is in the eating, which is a cliche and it's not relevant because the proof of the pudding is not in the eating anymore, it's in the rating. I looked up on Google Play this morning your app and it gets 4.5 out of five, which for those that don't use Google Play is a very high rating There's already somebody complaining about something. I think Monza up to 4.1, last time I looked they were in the threes and Atom Bank who raised an absolute fortune are dismal, they're down at 2.3 actually. The fact that you're 4.5 out of five while you're adding all these services shows that you've done it very well. So that's the sort of brand growth and that's the kind of software ideas. So what about the regulation? Because obviously you guys have got VCs on the board and they expect you to sort of have some rational reasons for doing things and for not doing things. You'd have sat down with the pros and cons things about, should we become a bank or should we become an eMoney license? So what was it that made you guys go down the route of being an eMoney platform or what are these things are called?
00:21:09 · Tony Clark, Nik Storonsky
[00:21:09] S2: Yes, and the proof of the pudding is in the eating, which is a cliche and it's not relevant because the proof of the pudding is not in the eating anymore, it's in the rating. I looked up on Google Play this morning your app and it gets 4.5 out of five, which for those that don't use Google Play is a very high rating There's already somebody complaining about something. I think Monza up to 4.1, last time I looked they were in the threes and Atom Bank who raised an absolute fortune are dismal, they're down at 2.3 actually. The fact that you're 4.5 out of five while you're adding all these services shows that you've done it very well. So that's the sort of brand growth and that's the kind of software ideas. So what about the regulation? Because obviously you guys have got VCs on the board and they expect you to sort of have some rational reasons for doing things and for not doing things. You'd have sat down with the pros and cons things about, should we become a bank or should we become an eMoney license? So what was it that made you guys go down the route of being an eMoney platform or what are these things are called? [00:22:04] S0: To be honest, we always kind of have philosophy and approach of doing things that are easier, right? What can we do to shift our goals in the most easiest way, right? And at that point of time, it was the most easiest way was to get e money license because quick, we got within three months. [00:22:23] S2: When was this, 2014 or 2015?
00:22:23 · Tony Clark, Nik Storonsky
[00:22:23] S2: When was this, 2014 or 2015? [00:22:25] S0: 2015. So we got the e money license, right, and we never kind of even thought about becoming a bank because it was a more complicated route to achieving our goals, right? [00:22:36] S2: And an e money licence, and they... Well you have to tell me what it lets you do, but one of the things you can do is actually then open current accounts for your customers. Unlike a bank, you don't hold the money yourself, but a bank holds the money, all the client funds in a big bucket, I don't know, Barclays or something like that. So anybody having money through your app, the money doesn't actually sit in this office as it were metaphorically speaking, but actually it still sits at Barclays in an old fashioned bank. But you do have the sort code and those kind of numbers on top of it. The credit risk is with Barclays, not on Revolut. [00:23:13] S0: Yeah, exactly. So if a particular customer stakes, all the credit risk of Barclays, what happens with Barclays? Go bust. [00:23:20] S2: And in terms of doing payments and things like that, talking of regulation, one of the regulators who I think is actually doing quite a good job is a payment systems regulator, is there an economic regulator rather than a bureaucracy regulator? It may change in the future of course. And they're opening up access to FPS, the faster payment system in The UK, which is the sort of the real semi real time or real time the same day system. Are you looking at doing those kind of things as well or can you do all that via the eMoney licence as it is?
00:23:20 · Tony Clark, Nik Storonsky
[00:23:20] S2: And in terms of doing payments and things like that, talking of regulation, one of the regulators who I think is actually doing quite a good job is a payment systems regulator, is there an economic regulator rather than a bureaucracy regulator? It may change in the future of course. And they're opening up access to FPS, the faster payment system in The UK, which is the sort of the real semi real time or real time the same day system. Are you looking at doing those kind of things as well or can you do all that via the eMoney licence as it is? [00:23:47] S0: Yeah, we can. We actually started already, like connecting to a faster payment system directly. [00:23:52] S2: Good. So on a different angle, I didn't quite understand from some of the articles I read about your international scale and certainly one of the problems with the banking licence is that even in the EU, even if The UK was staying in the EU, if you want to be a bank it's quite hard because you can end up having to get licences in different countries and all that kind of thing and it can take quite a long time. So how has it worked from a sort of regulatory perspective having a global money app? I mean, can you have a global money app? Does it have to be sort of registered everywhere or?