Fintech Insider Podcast by 11:FS
00:39:58 · Ross Gallagher, Sarah Kocianski
[00:39:58] S0: Yeah. Well So [00:39:59] S1: I was just gonna say, why not work on getting stuff up and running off the back of that Lithuanian license that they've got? I know and I know it has been mired in issues that... Too much. Actually, I believe that the the country's government has gotten involved about the handing out of that license and whether it was it is Lithuania, isn't it? Yeah. I had a mental block there. Why haven't they started taking deposits in the EU? Why haven't they got those banking products live there before they look at The UK market? Because as far as I understand it, Revolut's customers are actually pretty evenly spread. It's not like, for example, I don't know, Monzo was starting when most of their customers are in The UK for obvious reasons. But like I... As far as I understand it, like, Revolut is is pretty broad spread. So why aren't they doing that first?
00:40:44 · Valentina Kristensen, Ross Gallagher, Sarah Kocianski
[00:40:44] S3: No. I think also this is the challenge. Right? I mean, it's not just... Like, the license is one thing. I mean, it's a it's a big thing. But then once you get the license, you know... Well, sorry. Before you even get the license, you have to get the XCO, you know, the the the CEO, the audit. If you go on to their their careers page, I mean, they're currently recruiting for, like, three or four different c... Three CEOs, one in in The UK, one in Japan, one in Canada, two chief compliance officers, two chief risk officers, one chief product officer Yeah. 423 positions. They said they're gonna hire another 3,500 people, you know, so effectively trying to become a a global bank. And, again, I mean, that's replicating a model that that, you know, that has existed for a long time. [00:41:25] S0: And, again, to me, you know, it it was flying in the face of of sort of what they've said actually looks or at least comes across as actually being quite reactive because I think they're trying to add more seasoned traditional bankers to their board and positions of influence, you know, to to sort of, I guess, preempt and... Yeah. Exactly. [00:41:43] S1: I would just... On that note, and it's not really relevant to applying for a license. Although it might be actually. I'd like to see a bit more diversity in their highs. Any more, you know, men who've served at banks, you know, that's not really... If what they are doing is trying to bolster, you know, that that senior suite so that they look a bit more, I don't know, seasoned or respectable Only
00:41:43 · Sarah Kocianski, Pranav Sood
[00:41:43] S1: I would just... On that note, and it's not really relevant to applying for a license. Although it might be actually. I'd like to see a bit more diversity in their highs. Any more, you know, men who've served at banks, you know, that's not really... If what they are doing is trying to bolster, you know, that that senior suite so that they look a bit more, I don't know, seasoned or respectable Only [00:42:05] S2: one of them worked at Goldman Sachs. [00:42:06] S1: Only one? Oh, right then. Oh, okay.
00:42:06 · Sarah Kocianski, Ross Gallagher
[00:42:06] S1: Only one? Oh, right then. Oh, okay. [00:42:08] S0: But but what we've seen and, you know, I think a lot of the the the more established fintechs now that have had to engage with the regulator and that have since gone on to successfully acquire banking licenses is you need people in your ranks, traditional bankers who are used to engaging with the regulator, who are used to regulator speak. So I think in that sense, I I get it. My only question or my only pushback is, are they a little bit late to the party here? Who knows? TBD. Okay. I am gonna move us on to our next story, which comes from BBC News and concerns Yas Bank in India with their operations being frozen and alarmingly, perhaps, the cofounder being arrested for alleged money laundering. So earlier this month, the Reserve Bank of India took control of the country's fifth largest private bank after it failed to secure a much needed capital injection. The central bank imposed a temporary $630 limit on withdrawals leading to long queues for cash, so no need to be alarmed whatsoever. This had a knock on effect on local fintechs, which Yas Bank supported for QR code payments. A few days later, then the Yas Bank cofounder, Rana Kapoor, was arrested over money laundering allegations. He was also accused of taking money to fund a housing finance company that later went bankrupt. Authorities claim that Kapoor's crimes involved $581,000,000 in funds, So small change. And currently, Yas Bank is working on a revival plan with the State Bank of India. I'm just gonna throw this one out there. This is nuts.
00:43:49 · Valentina Kristensen, Pranav Sood, Sarah Kocianski, Ross Gallagher
[00:43:49] S3: Yeah. It is. Like, I I just... I honestly don't know what to say. I mean, it's it's a problem with how they've been regulated. It's a problem with the corporate governance. It's a problem with the CEO. I mean, it's just like... It's a total disaster. I mean, I'm I'm I'm intrigued to see what kind of recovery plan, they'll come up with, but it's it's just shocking. [00:44:08] S2: To be clear, this isn't a surprise, by the way. So Yes Bank has [00:44:11] S1: Nobody's been in nobody's surprised by this. You've been following Yes Bank. [00:44:14] S2: I mean, it's been in trouble almost since it was founded. So the the whole thing is like an episode of Game of Thrones, the boardroom politics that have been involved almost since the beginning of of this this organisation. [00:44:25] S3: I wish I'd been following it sooner. [00:44:26] S2: It's been a great story, honestly. And even last year, there was a huge decrease in its share price, I think in Q1 when they brought a new CEO in, which is obviously not usually what you hope is gonna happen when you bring someone in to run the organisation. I think, I mean, two things. One is, yes, he's been accused of of lots of heinous crimes. This is also, and I'm speaking as an Indian, it is a country in which nearly 50% of the MPs in our lower house of parliament are accused of accused of crimes as well. So it's perhaps not as unusual as you might expect. [00:44:57] S0: It's almost a done thing.
00:44:57 · Ross Gallagher, Pranav Sood, Sarah Kocianski
[00:44:57] S0: It's almost a done thing. [00:44:58] S2: It's almost a done thing. Yeah, you're in the majority almost. But I think it does bring some quite interesting questions to light. There's been a ton of innovation in the kind of lending space in India in the last couple of years, both from the big tech guys, so Amazon, Xiaomi, Google as well have partnered as well, but also local players too. So Kashy, I think in particular has been quite an interesting one and lots of P2P stuff as well. And I hope that you know, as much as this is a really shocking story, it doesn't detract from the fact that there is a ton of quite exciting stuff going on and that you don't get that sort of tarnishing of everything with the same brush. [00:45:34] S1: To that point, whilst I'm not surprised by what happened with the S Bank because as you say, like a Netflix Netflix series coming soon. What what I hadn't foreseen, perhaps because I haven't been following the story closely enough, was that when it went down, it would take down all these fintechs with it because it's basically a large infrastructure provider. And they, you know, it kind of made sense basically basically what happened was they turned off all Yes Bank systems and that included all its APIs, which meant that everybody that was using the... Oh god, UPI, what does it stand for? [00:46:03] S2: I'll remember.