Fintech Insider Podcast by 11:FS
00:21:23 · Ross Gallagher, Valentina Kristensen
[00:21:23] S0: Meaningful benefit in the British economy. [00:21:25] S3: Yeah. I mean, I think also, you know, the the the point here is that having a very focused business model. Right? So we... We're not trying to be all things to all people. You know, we're just focusing on doing one thing really, really well and then going very deep on that. Whereas if you look at some of the other fintechs, obviously, they've taken a strategy which is, know, you to try and do a lot of different things, to gain, you know, to gain market share, to attract customers because maybe that customer doesn't necessarily want to have them as their current account, but they wanna use them for stock trading or they wanna use them for buying gold or whatever the the latest thing is now, buying crypto. So I think, you know, by being really, really focused and then obviously the efficiency that the platform has helped us to to get. So, you know, if you look at other metrics, you know, cost income ratios, you know, run rate is 26%, ROE, return on required equity is is 22%, you know, you compare that to the figures from other banks and and, you know, that's dramatically different. [00:22:21] S0: Yeah. Absolutely. I I I know Rishi as well sort of believes in not spending money that you're not gonna get back. I know I've heard him say that a couple of times. And and and I suppose the contrast being other fintechs that are prioritizing scale. I think that's something that is sort of really ingrained in the Oak North culture.
00:22:21 · Ross Gallagher, Valentina Kristensen
[00:22:21] S0: Yeah. Absolutely. I I I know Rishi as well sort of believes in not spending money that you're not gonna get back. I know I've heard him say that a couple of times. And and and I suppose the contrast being other fintechs that are prioritizing scale. I think that's something that is sort of really ingrained in the Oak North culture. [00:22:37] S3: Yeah. I mean, I think the guess... The thing is because the the Feet headline said, you know, profits have have grown, you know, but growth has slowed. I mean, the reality is that when you're... You can't have triple digit growth forever. Right? Because the the the sum gets larger. And I think we'll see... You know, we'll continue to see, hopefully, double digit growth on the bank and and then triple digit growth for the for the platform.
00:22:58 · Sarah Kocianski
[00:22:58] S1: Yeah. I mean, I think interesting from from my perspective, I I always use Oak North as kind of the the example for the... I call them the neobank will never be profitable brigade. And I'm like, well, there are there are other examples outside of Oak North, but Oak North is, you know, the best one, the easiest one to hold up. And I think it exactly... The model you have speaks to the fact of doing one thing. Well, I would say doing one thing and doing it really, really well. But I think that the one thing that Oak North has done really, really well is that platform is that model is getting the underlying kind of business basics right for working out who you lend to, how much you lend to, etcetera, etcetera. And then, of course, I I haven't read through the numbers in detail, please forgive me. But I'm fairly sure that the platform part of the business will be contributing significantly to to that profitability because other institutions are using it. And why wouldn't they if it's proven so successful for Oak North? I think that just goes to show that actually the one thing you do well doesn't have to necessarily be on the customer end. It doesn't necessarily have to be that kind of new interface or shiny new app or whatever else it is. It can actually just be looking at part of a of a financial organization of a bank that just hasn't changed for hundreds of years or not hundreds of years, but probably in the case of a platform like that and the models it's using fifty, sixty, seventy, eighty years. I'm thinking if we did that bit right, everything else around it will probably come right as well. So, yeah, I just like... I like the diversity of the model.
00:24:15 · Ross Gallagher, Valentina Kristensen
[00:24:15] S0: Yeah. I completely agree. And I think it's another example of where you guys have been quite strategic. Obviously, you've looked at the platform as a way to expand internationally where... But it also allows you guys to really hone in on The UK and what you do particularly well. [00:24:29] S3: I mean, another thing, I guess, I mean, it was picked up less, which I I guess is to be expected. But the fact that we became one of the first banks globally to achieve net carbon zero, which is something else that we're, you know, super, super proud of. I mean, for scope one and two emissions. So, I mean, I won't go into the sort of boring detail of scope one and two... What scope one, two, and three emissions. But, again, you know, it's it's sort of looking at our carbon footprint, every flight that our employees take, you know, the cost for our our IT servers, you know, AWS, you know, those those big, you know, those... The the big servers you'll see out in the desert. So, you know, I think we're we're just really mindful of of, you know, being sustainable in terms of economic sustainability and having a business that makes sense, but also being sustainable in terms of, you know, doing what's right for, you know, the businesses that for the environment that we're we're obviously in and for the the communities that we're obviously, helping to grow. Can I
00:24:29 · Valentina Kristensen, Sarah Kocianski
[00:24:29] S3: I mean, another thing, I guess, I mean, it was picked up less, which I I guess is to be expected. But the fact that we became one of the first banks globally to achieve net carbon zero, which is something else that we're, you know, super, super proud of. I mean, for scope one and two emissions. So, I mean, I won't go into the sort of boring detail of scope one and two... What scope one, two, and three emissions. But, again, you know, it's it's sort of looking at our carbon footprint, every flight that our employees take, you know, the cost for our our IT servers, you know, AWS, you know, those those big, you know, those... The the big servers you'll see out in the desert. So, you know, I think we're we're just really mindful of of, you know, being sustainable in terms of economic sustainability and having a business that makes sense, but also being sustainable in terms of, you know, doing what's right for, you know, the businesses that for the environment that we're we're obviously in and for the the communities that we're obviously, helping to grow. Can I [00:25:21] S1: ask a quick question about that, actually? I just wondered how much of that is driven by customer demand and how much of that is driven by... Or or customer... You know, on both sides, customers, or how much of it is just driven by the ethos of the company itself?
00:25:21 · Sarah Kocianski, Valentina Kristensen
[00:25:21] S1: ask a quick question about that, actually? I just wondered how much of that is driven by customer demand and how much of that is driven by... Or or customer... You know, on both sides, customers, or how much of it is just driven by the ethos of the company itself? [00:25:31] S3: So I think, I mean, if you look at a business like Leon, obviously, a really great example of a business that's very socially minded. You know, they're very much the sort of forefront of the vegan movement, you know, no plastic packaging. So it is something that, know, we are very conscious of, you know, the businesses that we lend to. We don't lend to businesses that are doing, you know, oil and gas or leather tanning or gambling, anything like that. So that's that's one piece of it. But then also... But you [00:25:55] S1: do do alcohol. Right? Get back to our pub point. Bars.