Emmanuel Daniel, chairman, The Asian Banker, outlines the profiles of several digital entrepreneurs to remind bankers the skill, talent and passion they are up against in transforming our world today. He gave this speech at the International Excellence in Retail Finance Awards Dinner 2018.
Here is the transcript:
Emmanuel: Abdul Rahman Ashraf. 2011 Syrian Refugee. He tells the story of how in his hometown in Syria whenever there was a bombing that he was unable to find his parents, find his sisters, find his friends and when there is a bombing in another town, he’s unable to find news on any of the people who are important to him. And then the email comes once a week, a text message comes every five days and every trickle of this message brings tears to his eyes and a sense of desperation. And one day when there was a bombing in another town, he did not hear news from his friends for over a month. He said, “It drives you crazy.”
Ashraf moved to Germany after the war like many Syrian refugees and in Germany, he stood guard. He did a Master’s in Applied Science and as a student and as a master’s graduate he did experiments and launched a software called FreeCom. It’s a software that enables mobile phones to talk and relay one to the next to the next to the next until you’re able to send messages all the way from Syria to Argentina without Wi-Fi. The technology is still being commercialized but it is on its way. Imagine the profound effect it’s going to have on the future of telcos, on the future of ISPs, on the future of personalization where we now do not need institutions in order to talk to each other. That future is now.
In 2016, Ashraf won the European Youth award as a refugee in an advanced society. Two friends, Taavet Hinrikus and Kristo Kaarmann, buddies working in London had a small very interesting problem. Taavet was paid in Euros because he worked for Skype and Kristo was paid in sterling pounds and both of them were Estonians and needed to send money back home. And so they made a deal where Kristo – or rather Taavet is paid in Euros and Kristo was paid in sterling pounds and so without having to exchange money, they used Taavet’s money in order to have money sent over back home to Estonia. In 2011, they thought, “Wait a minute. If we can do this, we can do this for a lot of other people too.”
And the reason they decided not to use the banks was because they only needed to Google to see what the banks were charging in terms of exchange rate as well as fees before their salaries were able to reach home and pay for mortgages and so on. In 2012, that business online was generating 10 million Euros a month in transactions. In other words, there were strangers willing to trust them in order to make that transaction. By 2017, it was doing 1 billion dollars a month. Their investors include Peter Thiel, Richard Branson, and so on and by 2016 they had 117 million dollars in funding.
And I met Kristo recently and asked him, “So, how technically difficult is this business? Do you have an nostro account in all of the cities that you do?” They now do 33 currencies around the world. And he says, “No, it’s still the same business which is I have money here and I have money there and I just control that and pay on both sides. And that’s still the business. There is hardly any intelligence involved in making those transactions and that business is scaling like you wouldn’t believe.” Yes, they put in place the KYCs and so on but they are well on their way to becoming a player on the wholesale side of the FX business.
Young lady in Singapore graduated, went out, and got a job like all Singaporean young people do in a bank. Mother feel ill, was suffering from cancer. She dug up all the insurance policies, went to the insurance companies one by one, took leave to be able to scrounge money together to be able to deal with the mother’s cancer payments and was so frustrated that there were policies that were lapsed, there were policies that had exclusions and so on. And so this young lady, Val Yap started a company called Policy Pal.
These are angry young people. These are hungry young people. These are people who see the lapse between real life and the services that the financial services industry has been giving them. And the day has come where they can take matters into their own hands and do something about it. Even as we celebrate yet another year of excellence in retail financial services, the tone has been changing. It used to be that we were celebrating you as banks but increasingly we need to celebrate you as individuals, as hungry individuals, as angry individuals, as individuals who want to make a difference in the world that we live in. Vitalik Buterin, the founder of Ethereum after Bitcoin. He was the editor of a Bitcoin online magazine and he kept reading about it and he said, “There’s one thing still missing in bitcoin which is it doesn’t have an application layer so let me go out and create an alternative version that solves that problem.” Age, 19
My godkid in Hong Kong, one of several I have but Jeannie’s, age 11 sitting next to me on a post-Chinese New Year’s evening in Hong Kong. Her mother said, “Have you seen Jeannie latest game that she programmed?” And I said, “Jeannie programmed a game?” And I borrowed her phone and I played a game that a young 11-year old programmed on her mobile phone. When we talk about APIs, we’re talking about this generation. We’re talking about their APIs, not yours.
They have a life to live. They have dreams to accomplish. They have fun to have. They don’t exist to solve your legacy problems. And by the time they’re 20 years old, they’ll be creating APIs that creates an entire universe around themselves of which you will be a little nothing. And so, every day that you go to work and think that your partners have to obey you, put up with you, understand the constraints of compliance that you have to put up with, think about these kids and the world that is already been created in their name. Linus Torvalds introduced the Linux open source platform in 1991. I use this picture of him because he’s not actually a very nice person and he introduced a whole world where thousands of developers around the world can go out and contribute to an open platform and build software for free.
In 2005, he wrote the program for something called Git (GitHub) and Git as you know in English is like if someone calls you a git, it’s not a very good thing but what he was trying to say is that it’s now possible to take the collective contribution of the programmer community around the world and turn it into products, into platforms, into applications that all of us can use and there is a way now to be able to track and trace those developments. So, it is that when banks today say that you like the idea of block chain, but you don’t like the idea of bitcoin, that you like the fact that block chain has 12 very strong attributes but you know what? Only five are important to banks. Think about the thousands and thousands of developers out there who are asking the other question which is if it’s got 12 attributes, can I make another 20?
If these are the limits of what technology can do, can I break those limits? Can I call the bluff on you? Can I create a new future? So, this year we have transformed completely the evaluation criteria for the retail financial services awards program and those of you who attended this morning’s session would have seen to your utter shock that banks have started to lose their positioning in digital finance to a whole range of new digital financial institutions that did not exist – at least one of them did not exist the year before last year. And so it is that we create our individual journeys and we tell our own stories but even as we run this award program year after year, we need that refresh. We need that reminder that if there is no hunger, if there is no anger, there is no future.
And when it comes to the future, don’t try to fit the future into your little bank. Don’t try to fit the future into your little understanding of what the future is going to be. Don’t try to fit the future into your job because the future does not respect any of this and the future’s being generated and created by a generation that does not respect you.
Phillip Paillart, the chairman of the Excellence in Retail Financial Services program is not able to be with us today because his father, 92 years old is very ill and our thoughts are with him and even as we celebrate this evening, let’s celebrate with hunger, with anger, and with anticipation of the future that we can all create. Thank you.