Digital Banks vs Incumbents + Governments vs Social Media

Episode Transcript (computer-generated)

Paul Spain:
Hey, folks, greetings and welcome along to the New Zealand tech podcast. I’m your host, Paul Spain and fantastic to have Sulabh Sharma joining us from debut in New Zealand. Welcome along. How are you?

Sulabh Sharma:
Thanks, Paul. Good, thank you.

Paul Spain:
Yeah. Great to have you joining us. I hear this is your first, your first podcast appearance. Yep. What a privilege. Well, exciting. Maybe you can give listeners just a quick overview of where you fit into the, the big wide world of tech in New Zealand.

Sulabh Sharma:
Sure. Sulabh Sharma, co founder at debut, we are building digital only bank in New Zealand. We are disclaimer we are not a bank yet. My past career, whole my life I’ve been in digital products, both in banking and insurance and has been working on some really cool customer journeys and stuff. And a couple of years ago started this debut journey.

Paul Spain:
Great. Oh, great. Great to have you on the show, Sulabh. Well, let’s jump in. Of course, a big thank you to our show partners One NZ Spark, HP, 2degrees and Gorilla Technology. Now, a bit we want to get through today. Definitely keen to get into that world of digital banking, the Neo bank. What does that look like? What should it look like for New Zealand? But also a few other topics.

Paul Spain:
There’s been a bit of a push to move New Zealand forward on this kind of, I guess, right, to repair, as it sort of often referred to. And then some big topics on the international front, what’s happening with voice assistants actually getting smart and using AI? What’s happening in the world of social media as it relates to government led content moderation and blocking? So we had some new information through from Mark Zuckerberg sort of admitting that they did some stuff that maybe they’re not so proud of now, over the last few years and also we’ve seen X or Twitter banned in Brazil. So, yeah, some interesting movements and then some flow ons of these things. So let’s jump straight in. I think let’s start on the New Zealand front where we’ve seen really this push to move New Zealand forward when it comes to a right to repair. We’ve seen consumer New Zealand delivering a petition to parliament to really encourage introduction of repairability labels on technology and appliances that consumers buy. But I guess if you sort of step back and look at the bigger picture, and of course, we’ve got. There are moves in parliament there.

Paul Spain:
The Green Party are suggesting a kind of an amendment to the Consumer Guarantees act or bill down this track as well around giving Kiwis that ability to repair their own devices and appliances. We’ve seen some of this on an international basis and there tend to be sort of multiple aspects to it from the way that gadgets and technology and appliances are kind of built. Some of them aren’t necessarily built in a way where they’re easy to repair. In other cases, it’s, well, can consumers get access to the right tools and the right parts to get into things? I remember way back as a. As a youngster, there used to be this tool called a Mac opener to be able to get into the very, very early Macs. It’s this big, long, kind of like a screwdriver type thing on one end. But it needed to be really, really long to get into the back of a Mac. So, yeah, most people didn’t have access to the right tool and then it didn’t just have a screwdriver, typical flat or Philips thing on it.

Paul Spain:
So this was the device you’d buy to get into your Mac. And so it became only a limited number of people would have access to that to be able to get in there. So these things have been going on for a long time. Of course, we also had a lot of things get smaller and more shrunk down, which makes it harder to repair. What sort of technology do you use and how, you know, how do you feel about apple?

Sulabh Sharma:
Definitely, yeah. And to your story, Apple has always been like that a little bit, you know, where.

Paul Spain:
Bit of a challenge.

Sulabh Sharma:
Bit of challenge, yeah. But I guess it’s, you know, it’s like it helps moving from that consumer economy to more circular economy where things can be circulated back in stuff and as much as can be. Can be rotated, can be circulated. I’ll be very keen on understanding exactly what percentage of waste is happening because of what kind of thing is appliances the main reason, or is it the electronic device and stuff? Because these phones are. I guess Apple has been on a journey as well. You can see with every WWDC there is more and more they are doing now to make. Make phones more circular and green. So good to know where the problems are if we apply the first principles.

Sulabh Sharma:
And just understanding and then modularity is one thing. Again, you want to keep people safe as well. So not everyone starts tinkling with everything out there. So how things can be more modular and exchangeable. If something breaks, you can pull it out. And if you remember, Google put out a design for a modular phone once it went nowhere, but kind of the concept where, you know, for the. Specifically for the large appliances, where there’s no other way to throw it away and buy another one. How can you do more modular and.

Sulabh Sharma:
Yeah, it’s all interesting. Yeah, yeah.

Paul Spain:
Look, and, you know, in some areas, we see these sort of open source designs kind of floating around the fPv, first person view drones. There’s kind of, you know, these kind of standards that have gained some adoption, but there’s, you know, so often, you know, the bigger manufacturers will have their way of doing something. There’s completely, you know, no direct connection between, I don’t know, you know, say one washing machine manufacturer and another. Right. It’s like they’ve got their thing. They all want to be different and differentiate. Yeah. And, yeah.

Paul Spain:
That brings with it, you know, all sorts of. All sorts of issues. It’s hard to get parts, it’s hard to repair things. And most often because the prices of appliances have, you know, have come down as well. You got a dishwasher that’s not working. Do you get it fixed? Yeah, if it’s a. If it’s a high end dishwasher, sure. But, yeah, I saw.

Paul Spain:
Saw an ad this week for a dishwasher is dollar 399. You know, you think of that in terms of how much labour are you going to get for below that figure? If your dishwasher was failing, if you’ve bought a $400 dishwasher, how likely are you to want to repair it? Unless you can easily do it yourself and probably getting any parts for it. If it needs anything at all complicated, that’s probably pretty unlikely. There’s definitely some genuine challenges there. There’s the software side with a lot of these things that we’ve talked through in the past as well, right through to our vehicles. So I think if you were to really try and design it, and I haven’t seen anybody do this, but in theory, you’d kind of have a bit of a matrix and different things would have different requirements on them from the manufacturer. And then there’d be some sort of a. I don’t know, some sort.

Paul Spain:
Yeah, some sort of a responsibility back to the manufacturer. You know, I was in an Uber earlier on today, and it was a Havil vehicle from China, you know, other time in the day in an American electric vehicle. And you kind of look across these different brands and they’ve each got differing commitments to how well their software is kind of going to get kept up to date, whether it’s getting over the year updates and so on. And as more and more things get connected to Wifi and Internet in one form or another, then you need security updates, so on. So it’s probably not a sort of simple cookie cutter approach to get a good result. So I’m kind of curious how this plays out. And of course, New Zealand is a smaller market, which is probably two sides to it. You know, one.

Paul Spain:
Well, we maybe can’t demand too much because manufacturers will just say, well, you’re demanding that, and it doesn’t fit with what we’re doing or with what other countries are doing, then, you know, we’ll stop selling our product in New Zealand if you went too far. On the flip side is a smaller market we can get in and we can kind of, you know, put in place legislation that maybe encourages other countries to follow suit. And, you know, we can maybe get those things through a little bit quicker and easier, as long as maybe. Yeah, we have to balance expectations there.

Sulabh Sharma:
Yeah, totally. I think if there’s a small nudge towards the right direction, there’s nothing wrong with that. Yeah.

Paul Spain:
Now we’ve heard that Amazon’s new voice assistant going forward is going to be using the technology from Anthropic. So they make the Claude artificial intelligence models, which I think a lot of people find them to be really good, to find Claude to be very competitive with chat, GPT and so on. Obviously there are variances, but, yeah, it really seems as though Amazon, with this news that’s come through from Reuters, it’s something of an admission that getting generative AI, that is really good, and we’re certainly a long way off perfection when it comes to GenAI, aren’t we? But this is quite hard to do, and so hence they’re putting aside their own technology. I think they’ve invested something like 4 billion us into anthropic. So, yeah, somewhat in parallel, I suppose you could say, or similar to Microsoft’s putting in 10 billion into open AI. So this is interesting. The bit that in some ways has probably will catch people a little bit off guard is that it sounds like most likely, according to the, what’s been picked up by Reuters, is that Amazon are likely to be charging a monthly fee for this with their chat capability, certainly for what they’re calling as their new remarkable version of Alexa. So I’m kind of curious how that ends up playing out, because Amazon have done very, very well with their smart assistants and a lot of Alexas out there.

Paul Spain:
Between them and Google, they’ve got the lion’s share of that market of those smart speakers. Although Apple are in there, too, and we’re not too far off. Well, the initial launch of iOS 18 is going to be holding back with Apple intelligence, as they’re calling their AI suite. Apparently it’s not going to be quite there at launch, but coming soon after. So there’s a lot coming through. But, yeah, we’ve had these smart assistants for a long time, they’ve been really dumb and it seems like now maybe to get a good capability, you’re going to have to front up with. With some cash.

Sulabh Sharma:
Yeah, yeah. Not only, I think, and definitely Alexa at my home is definitely due for an upgrade.

Paul Spain:
Yeah.

Sulabh Sharma:
I wonder, though, one thing, which is with smart speakers, what’s the scope of intelligence that you need for the conversations? You know, like I get on the. With the OpenAI app, chat GPT app on my phone, there plenty of questions that I ask now. Actually, I’ll probably be using chat GPT more. More than I use Google now because there’s a large scope of interactions, conversation information. But when you’re at your home and you have the speaker sitting in your home, it’s usually to interact with your entertainment, like play a music or play a show, or it’s to interact with your home tech. And like, how, I’m wondering, it’s not a huge. So I don’t mind paying for chat GPT, but I probably would mind paying for a very set number of instructions that I’m giving to a home intelligence speaker. Does it make sense? It’s a little bit different.

Sulabh Sharma:
So I wonder what would happen when you make it charged, especially something that’s just sitting there.

Paul Spain:
Yeah, that’s interesting. And I mean, Reuters, their story comes from, they’re saying interviews with five people with direct knowledge of, of the Alexa strategy. So it’s kind of definitely off the records type stuff. So we don’t have the full picture yet. I imagine there could easily be free versions and a bit of a mix. I mean, to that point, yes, that’s how we tend to interact with our smart assistants today, but maybe more so because they’re pretty dumb. Right. It’s like, you know, if I, you know, if you’re working with colleagues that don’t know a particular thing, then, or don’t have expertise in a particular area, then you’re less likely to sort of ask them about that.

Paul Spain:
But if you’ve got a colleague who is really up with a play on a particular area that you’re interested in, then, hey, they become your go to. And I think there’s a level to which, if we’ve got the, the AI that is really, you know, really, really good, then you’re more likely to lean in and have that conversation. And I’m curious how that does, you know, play out what it looks like in the, in the home and future, yes. We, we can always go to our smartphones and use, you know, chat GPT or Claude or, you know, these varying tools directly on, on our phones. But yeah, there is that. There’s that kind of whole live chat type aspect which, of course, you get with your, say, paid subscription to chat GPT and you can do that in the car over Bluetooth or whatever your scenario is, and kind of have that live chat with what can feel like the smartest people in the world on the other end. Sometimes it doesn’t feel like that at all, to be fair. But certainly drawing from a big knowledge pool.

Paul Spain:
Yeah. I’m kind of curious how this plays out. Yeah.

Sulabh Sharma:
Even, sorry, even third party integration, like we would love to have. Again, I think that space, this is all going in kind of good direction. So keen to see. Yeah.

Paul Spain:
Now, next up. Yeah. Social media. So Mark Zuckerberg has said that, yeah, during, I guess during the height of COVID and so on, that they censored content that now in hindsight, that they probably shouldn’t have. He said they were under a huge amount of pressure to censor content during the pandemic and really were pointing to the White House, the Biden administration, putting pressure on them to take down content. And I guess we’ve seen sort of variations on that in a number of situations, not just with meta, but certainly with Twitter to varying degrees where they censored things. We’ve certainly seen some changes in terms of the way these platforms are run. And, yeah, it’s really interesting to hear Zuckerberg.

Paul Spain:
Yeah. Basically call out what happened previously in private. We didn’t really know what was going on other than probably there have been stories coming through and certainly this has been one of the things that we’ve heard from X. And I guess they had their Twitter files kind of where they, they unveiled a lot of what went on behind the scenes, you know, in the past days before the sort of recent change in ownership. And I think there’s probably going to be quite mixed views around, you know, what is the right approach to censoring stuff? And do you really want governments to have back channels into these platforms and having a lot of control where maybe it sits outside of the law, but also how much do you want legislation to be able to control what discussions are going to be had? I think there’s certainly some complexities here. Right?

Sulabh Sharma:
Yeah, it’s not that black and white. Yeah.

Paul Spain:
I was reading about x and sounded like they under request from Indian government. Yeah, that basically blocked over 200,000 accounts earlier on in the year, which sounds like a massive, massive number of accounts to block. Of course, when you look at social media platforms, of course, there are ways to sort of have bots running accounts and so on. But, yeah, that seems like, well, that’s a huge number of accounts just to take off the air, as it were.

Sulabh Sharma:
Yeah, no, that’s the kind of ongoing sort of debate how open things are and how controlled things are. So, yeah, yeah.

Paul Spain:
And, I mean, I think in that case, it was like, okay, you know, is this fear inappropriate or is this really coming from, you know, the government to sort of, you know, quash views that maybe don’t and how do, you know, don’t align with theirs? And I think, you know, it’s worse where there is no disclosure, where you don’t know what’s happening. And that sort of seems to be, you know, part of where we’ve had this latest, you know, pushback on, on X Dev in Brazil, where we’ve got basically musk saying, look, we’ve been asked to take down accounts and told that if we don’t, then there’s some really big consequences. But then on the flip side, the pushback is actually, in doing so, we would actually be breaking Brazilian law. So it’s kind of like, you know, it sounds like kind of damned if you do, damned if you don’t. There’s not necessarily an easy option there. And you’re obviously getting different messaging from each side. So from Brazilian side, where you’ve got a judge who said, hey, take these accounts down, they’re spreading misinformation. But, yeah, then you’ve also got.

Paul Spain:
Now it appears the same judge has done something that I think is probably very odd to most people. He’s now holding Starlink, which is a completely different legal entity to x, accountable for some of his complaints around x, which seems like, oh, yep, we’ve got a bit of a fight on our hands here between things are getting very personal, put it that way. And I don’t know whether Musk is kind of out of his depth here and whether what we’re seeing now is a trend which is going to see social media platforms just shut down. Brazil’s one of the, I think, the 6th largest population in the world, so a very, very big market for x. And, yeah, as of now, they’ve been shut down. And I imagine either they never come back or if they do, they come back sort of smaller because people will have already migrated away to other platforms. So, yeah, it is concerning and I don’t know how you get this stuff right. You know, I’m not keen on, say, the Chinese approach, which is kind of like, hey, they completely control the messaging and you either align with what the government wants or, you know, you might disappear for a while and all sorts of other kind of, you know, scenarios that can happen when you’ve got a, you know, a regime of that sort of nature that has a very strong hold on people and there isn’t that democratic element to it where government gets too heavy handed, you get the boot.

Paul Spain:
That’s very different. And I think probably most of us would hope would still be pretty keen on democracy. And that does mean we’ve got to get things right from a free speech perspective. But there also do need to be, need to be some limits and you.

Sulabh Sharma:
Have to put some guardrails in.

Paul Spain:
Yeah, but I don’t know how you get that stuff right. It seems to be kind of all over the place at the moment.

Sulabh Sharma:
Yeah. Yeah. I don’t know either. Yeah, there’s a concept of, there’s a, in the, in the blockchain world, there’s a concept of Dow, have you heard that decentralized autonomous organization, which is more, you’re basically decentralizing the control of content and ownership and basically, you know, maybe that, but it’s far in the future, you know, where it’s not very small number of people making decisions, rather a whole, you know, decentralized kind of organization collaborating with each other to make a decision. So, I don’t know.

Paul Spain:
Yeah. Yeah. It’s an interesting thought, isn’t it? And, I mean, I think even with Dallas, we’ve seen, you know, we’ve seen some challenges in the past, right, where someone gets a little bit too much control through one mechanism or another and, yeah, suddenly you’re in another challenging position. So, yeah, these things are really easier said than done, but I think I, what is good is these things are being talked about. They’re out in the open. There is a level, certainly within new Zealand of us kind of being able to hear a reasonably broad story of backwards and forwards. I’m not that sort of excited around, say, the position that Brazil is in at the moment where one whole platform is completely shut down. So, yeah, I’m really curious how that plays out.

Paul Spain:
Does seem as though x as a, as a platform has been relied upon by a lot of people in Brazil. Fortunately, it’s not the only platform. But if you’ve got a scenario where, let’s say, all of the other social media players are being heavily controlled by a government that maybe isn’t actually behaving in a democratic manner, then that becomes a problem. And I guess all of this ties into the fact that we’ve moved to some very dominant technologically enabled communications platform platforms across the planet, and that includes our biggest big publishers, the Reuters, the BBC’s, and all of these other kind of media outlets. And the same in New Zealand, we’ve got a sort of small number that we get most from, and a lot of our news comes from a small number of global players, be they social media outlets or international news outlets. Yeah, you don’t necessarily get the full story all the way along with these platforms. Right. So, yeah.

Sulabh Sharma:
Does it say any reason why this happened in Brazil?

Paul Spain:
I think, I mean, those that are interested, I think it is probably worth going into, probably picking up a mix of the content to kind of get both sides, and some media will give you kind of a view on both sides. Some media will be kind of skewed in a kind of a more direction towards, say, you know, Musk’s viewpoint. Some will be more in the direction of the Brazilian judges viewpoint. You know, both of them, you know, appear to, you know, be making some sense, and it’s pretty hard to kind of get, you know, to get into, well, what’s the. What’s the reality? What’s the full story? I think the thing that did jump out, you know, to me around what was happening here was, was just maybe that, that sort of, you know, personal nature where, you know, we’re seeing, you know, the critic, the criticism of the judge, you know, in Brazil, and then, you know, the judge coming against, you know, not only Twitter or X, but then completely different legal entity with different sort of shareholders and so on. And, you know, the commonality being that obviously, you know, Musk is the founder of Starlink SpaceX, and so, like, ooh, that’s. That actually seems quite questionable. Like, that’s a very, very odd thing to do from any sort of legal standpoint, I think.

Paul Spain:
Yeah, like, you know, we have legal structures in place. Different legal entities are different legal entities. You can’t, you know. Yeah. That just sort of seems way, way, way off. I can understand, you know, why somebody might do it, but I can’t align that in terms of how you could legally go after a completely different entity with different shareholders and try and try and put that sort of pressure on. And it seems like Musk’s sort of response is that, well, they’re going to possibly have to offer Starlink for free to keep their customers kind of online in the Brazil market. So, yeah, fascinating.

Paul Spain:
And tied in, I guess, with that is the other social media platforms. So blue sky had a real growth in users because that’s effectively very similar platform. You call it an X or a Twitter clone in its own way, although, you know, unique in terms of how it’s decentralized, which brings with it some of its own challenges, but, yeah, some real growth there because of that. And then one last thing before we sort of delve into the, into the digital banking world. Headline that was on the BBC caught my attention, and this was around the stealing of voices. And so, yeah, the scenario we had, um, is this guy, um, Paul Sky Lemon, um, who got a, got a little bit of a shock, um, uh, you know, him and his partner, you know, were driving down the road, they’re listening to a podcast around strikes in Hollywood and how artificial intelligence might, you know, might impact, impact them and, you know, as people, you know, doing voice content and voiceovers and so on. And then they heard the voice and it was actually his voice was coming through on this podcast. So when you talk about AI taking people’s jobs away, this was the AI was literally, yeah.

Paul Spain:
Being able to emulate his voice. And that certainly wasn’t something that they kind of signed off on. So, yeah, there’s an interesting story there online of how this happened and how this couple were basically paid to record some voice, apparently for research into speech synthesis. But, you know, they understood that was what it was just a research project. And then it got to a point where. Where their voices were actually cloned and people were able to make content in their voices. I guess this is the world we’re in right now, to a degree. Right.

Paul Spain:
Our content that’s online gets picked, has got picked up in a lot of cases by the likes of OpenAI or search engines are pulling that data in and then are using it from an AI context. And we don’t really have quite the perfect sort of legislation to cover every scenario, which is very common, too. We’ve heard around AI kind of apparently going through and absorbing YouTube and Google sounding quite upset around this. But of course, Google do exactly the same sort of stuff themselves. So, yeah, we’re not in a perfect world where people’s content, their intellectual property, their research is maybe fully treated appropriately. And I think there’s a degree to which we all advantage off this, but there are disadvantages, you know, for all of us as well.

Sulabh Sharma:
And that makes it a harder problem, you know, the kind of you do, you stop or do you, you know, how do you balance it out? I guess it’s just evolution of things. You know, we’ll have better systems, better marking, better certifications to avoid misuse of, you know, kind of original, original information and, you know, identity attributes like voice, face, etcetera. So. But I guess it’s too early. Like, I mean if you look at chat, GPT, it’s just a couple of years, you know, it actually became popular with the consumer. So it’s very new in the journey and regulation is not known to be moving that fast anyway with the tech. So I guess there will be provisions. And these risks are real risk.

Sulabh Sharma:
Even deep fakes are getting more and more.

Paul Spain:
Yeah, it gets easier and easier to do these things, doesn’t it? And often there is a level of legislation that is helpful and then other areas where new legislation needs to be developed, but that doesn’t necessarily come quickly if there’s not something that’s already an ideal fit. So. Yeah. Well, let’s dive into your startup and to debut. Yeah, sulabh, tell us a little bit about what you’re doing and how you ended up on this journey.

Sulabh Sharma:
Yeah, I think I have the best job. So debut is we are setting up a next gen bank in New Zealand. We are still going through our application process and journey. So we are not a bank yet. And really the real dream here is to, to just reimagine what bank means for Kiwis today and what bank and banking means for them. Just kind of change that. Yeah. We have launched a product earlier this year which basically does three things.

Sulabh Sharma:
It’s the only sort of FPOs slash debit card that also gives you interest. There’s no one that gives interest, only on your savings. No one gives on your current money or transactional money. So we challenge ourselves that. Why? Why not? And that’s one thing that the product does. The second thing it does is no fees when you’re traveling and using debut cards. So no FX fee, no spread of which means you’re saving at least three to 5% on your international expenses. And the third thing, mainly what debut app does today is having more control on your online payments and subscriptions.

Sulabh Sharma:
So you can create a virtual card, any number of virtual cards, and you can delete them and use those cards for subscription that sometimes get really hard to manage. And personally I paid for things that I just couldn’t, I just couldn’t find a way to switch them off.

Paul Spain:
Yes, yes.

Sulabh Sharma:
You know, so it gives you both things. It gives you more control on your subscription. But it also protects you, you know, because you’re not sharing your main card details everywhere online. It just helps you segregate, you know, your kind of your cards too. And if there’s anything goes wrong with any, any website or, you know, you’re on an unfamiliar website or not trusted completely, you can just use that virtual card and then delete it and nothing will happen.

Paul Spain:
That’s great. Yeah, really helpful. So tell us a little bit about who you’ve got backing you and what you’ve raised and what your team looks like.

Sulabh Sharma:
Yeah, sure. So we are completely New Zealand owned and operated. We were backed by NZdA VC’s and angel investors. We are very lean team of around 14 full time and part time. But all of us come from banking, digital banking payments background and we probably be a different kind of financial organization. We are say 60 65% tech and 30 35% finance. So although all of us have worked in building banking products and financial products in the past, so kind of that’s the composition of team. We are completely remote, you know, as additional business should be.

Sulabh Sharma:
We have offices where we can come in and meet and, you know, and do whiteboarding and that sort of stuff.

Paul Spain:
It’s not remote. No.

Sulabh Sharma:
But when we want to, it’s not a necessity. It’s more something we need to get together and work on. We can, but it’s not. We have complete flexibility otherwise.

Paul Spain:
Yeah, yeah. Interesting. And, you know, I guess one of the challenges with attracting customers is that we’re so used to traditional banks and we all feel, you know, reasonably safe when our money is in a traditional bank. You know, there is that mindset of, hey, if the money’s in the bank, rather than, you know, under your mattress, as we used to, you know, say, in years gone by, then that’s a sort of, you know, safe place to. Safe place to have it. I, you know, I think at times it’s like, well, this is a little startup, you know, how do we know there’s still going to be around, you know, if I. If I put some money in there, how much risk is it at? And so on. So just walk us through how you give people confidence around their funds if they were to decide, all right, going to do all my banking through debut from now on or within the limits of what’s possible as you’re not a full bank at this point in time.

Paul Spain:
But yeah, there’s some compelling reasons why folks might really want to get behind and support you. How does that look from a risk perspective?

Sulabh Sharma:
Yeah, let me answer that. Question in two parts. The first part, it’s very interesting that you say in New Zealand, people have that sort of mindset. And that’s right, there’s billions of dollars sitting in banks, basically making nothing for consumers and people losing money on, on their on call accounts and transactional accounts. But if you look at other markets, if you look at UK, Brazil, India, Australia, you know, things have moved on. There are more payment wallets today in the world, 4 billion compared to bank accounts, which is 2.4 billion. So I think there’s a whole. And again, those payment companies would have started with same challenges and same sort of, same sort of expectations in the market that why do I park my money in something like Paytm or whatever revolut in the UK or monzo? But then over time, it’s the relationship that you build with the customer.

Sulabh Sharma:
And that brings me to the second part of the question where we, until we become a fully licensed bank, we don’t even expect people to bring all their life savings with us. We expect them to get the value that they can get today, which is save on your fx. Don’t lose money. Don’t lose value of your transactional money to inflation. Don’t get ripped on online by using your main card. So I think, I think it’s how banking can be sliced and diced in so many layers. And there is a relationship you have to build with the customer. The problems we are solving today, we only expect people to hold that much value with us.

Sulabh Sharma:
And as we prove ourselves and as we grow and get licensed, it’s a separate question. That is money parked in your banks completely safe? That’s how we are. We have all grown up. As the deposit scheme comes in, the regulation gets a little bit more evolved. In New Zealand, your money is actually safe sitting in a bank. And debut will catch up with the license as well. We will obviously expect to build up more financial relationships. But right now, let’s just start small and let’s just solve some specific problems that we solve today.

Paul Spain:
Yeah, there must be some guidance. You have to operate in in terms of separation of funds and things like that, right?

Sulabh Sharma:
Totally. So. Oh, it’s very strict. It’s people’s money. There’s no nonsense there. We operate as a very independently managed trust and then that’s where the people’s money is held. All of that is in place. But we are working towards upgrading our regulatory status so we can be, it obviously comes with a lot of work, but that’s where we see we can, we can really make a difference in terms of the services provide to debut.

Paul Spain:
Yep, that’s really interesting. And so for folks who are interested in maybe experimenting and our listeners tend to be the sort of people that want to keep at the forefront of what’s going on and get a handle on these sorts of things, you know, for all sorts of reasons. What does it look like to get up and running with debut? How easy is it to get set up and, you know. Yeah, what should we all know?

Sulabh Sharma:
Yeah. You download the app, you are set up within five minutes. Everything is online and digital. You issue your card instantly. It’s powered by Mastercard, so we have a debit card, which works everywhere where Mastercard is accepted, which is basically everywhere. And you can add to Apple Wallet or Google Wallet and you’re good to go. Basically, from the moment you download the app to the moment, you can walk in a cafe and buy your first coffee. It should take you less than ten minutes.

Sulabh Sharma:
A lot of people are parking their transactional money with debut because, again, they’re not losing the value of their money to inflation to buy day to day groceries and transport and coffees and lunch and that sort of stuff. That’s kind of, and then the other area where people, where we’re getting a lot of response back from our community and customers is traveling overseas. So if you’re going traveling overseas, you can really save some money on exchange fee and commissions and stuff, which is usually the cost with big banks.

Paul Spain:
Yeah. So how does that work with your phone? Walking into a store overseas and using your debut account, how does that work?

Sulabh Sharma:
So again, thinking from the user experience, it is very simple. You’re just making a transaction as you would do with any other card. We’ll take care of the exchange rate. So that’s the exchange rate basically powered by Mastercard. So it’s one of the best rates.

Paul Spain:
So you give people a physical card.

Sulabh Sharma:
Oh, sorry. Yes, absolutely.

Paul Spain:
Because you’re mentioning putting it into wallets on the phone and so on.

Sulabh Sharma:
Yeah, yeah, yeah. But you’d be surprised how, you know, like in New Zealand, you still need card. Other issues, but you’ll surprise, you know, the tap actually works, you know, at a lot of places in Europe and Australia. Yeah. So you can, you can order plastic anytime after you’ve set up your account and.

Paul Spain:
Yeah, that’s good. And what sort of hoops are there in terms of you proving identities and things like that through? Obviously there’s some regulations there and so on. You want to keep things above board. So. Yeah. How complicated is that?

Sulabh Sharma:
So I’ve been involved in digital identity for a long time in my last work and career. And let me answer your first question. So it’s very easy. You just need your New Zealand driver’s licence or your passport and your face or yourself. Basically you scan your document and you look in the camera for literally 2 seconds. And that’s how we create onboard customers. And right now we only support New Zealand documents. We’ll be opening up more documents like international passports in the future.

Paul Spain:
And what do you do with that? Because we so often get asked for copies of passports or driver’s licenses and so on all around the world. I did a booking recently for some international travel and, you know, a portion of the accommodation as an Airbnb. And they’re saying, oh, we need a copy of, you know, of your documents. And I’m thinking, well, what’s some random Airbnb owner going to do with my documents? Right. Obviously as a fintech entity, you know, you’ve got a lot more weight on that sort of thing.

Sulabh Sharma:
Yeah, totally.

Paul Spain:
Can you walk us through a little bit of how that looks?

Sulabh Sharma:
Yeah. So as any financial institute involved in payments and stuff, you have to be very specific and particular about anti money laundering and other things. So the KYC, which is basically onboarding where, no, your customer helps us comply with the AML regulation and make sure that the person who is using debut is a legitimate person. And it doesn’t stop there. It’s an ongoing process where we definitely, within our bounds, we definitely have to make sure that nobody is actually misusing the system.

Paul Spain:
What sort of data do you have to keep from customers? What passes through, say, a third party who, who you might outsource, some of, you know, some of that work to, you know, what does that look like? Right. Because that’s sometimes where we see, you know, we see the issues, oh, x, y, z got, you know, got compromised and you know, you know, your driver’s license, all the details are out somewhere on the web. Now, you know, this and that. Even I went into not that long ago into one of, one of our big four, you know, banks in New Zealand and, you know, they wanted a digital copy or they were, oh, yeah, I’ll go and photocopy that. I’ll scan it, you know, whatever document. And I’m thinking, well, you know, where does it didn’t seem to be kind of floating into the sort of repository that you might kind of think about. It seemed like a very kind of manual, like, oh, I’m going to scan it, email it, copy it in some form and think, where does this end up? Right?

Sulabh Sharma:
Yeah, yeah. So, yeah, so I think in our process, we try to minimize the data that we are capturing. And even then we make sure that we only store data with us that we, as debut, need to store, you know, because there’s some regulation that we have to maintain and make. But then other just, it’s just common sense, you know, minimizing the amount of data. So we are not capturing any excessive data that we shouldn’t be and using the technology that is being tested in the market. So the system that we use for KYC is actually used by some of the big banks in Australia, a lot of financial organizations here. So they already have built these processes and protocols to make sure that they’re privacy compliant. And we are not storing any excessive.

Sulabh Sharma:
Everything is tokenized, anonymized, that sort of stuff. And it’s actually going in a very good direction with customer and data bill. They will be a lot more advancement in this area. The data that we store will be stored in more secure formats. Not getting into any technical words here, but yeah, it will be more secured and people will have more control of their data and what they want to share and what they don’t want to share.

Paul Spain:
That’s really interesting. And you have to go back and re verify these things over time as well, don’t you? You can’t assume somebody that signed up with a card, not that you’re a decade old, but, you know, say a decade down the track. You can’t be making too many assumptions. You have to recheck these things along the way.

Sulabh Sharma:
Yeah, it’s good practice in that sense.

Paul Spain:
Yeah, that’s great. So what’s next? What’s that journey for you to become kind of a fully fledged bank, as it were? We’re going to see bricks and mortar springing up on every street corner. I’m picking not.

Sulabh Sharma:
Yeah, the big dream is, again, not just building a bank, but building. If you go to a website, our mission has been to put a billion dollar back in kiwi pockets. That’s the mission. That’s the long term mission. And having a license is nothing. The, it’s a means to that. It’s not, it’s not the end outcome. I think the journey we are on right now is we are building product that solves problem even today within the regulatory boundaries we have.

Sulabh Sharma:
But not just, not just, not just giving you an app to download and do some stuff, but actually solve some problems. And what that does is basically it really helps engaging the community and understanding what’s outdated, what’s working, where have you got it wrong, where have you got it right? And keep building the product in that way, the license will actually help us to then offer more services, more products, where we can differentiate and where the customer is sort of underserved, where there have been gaps left by the big banks and stuff. So I guess that’s the long dream, is to build up a choice here in New Zealand where if people want to bank local, they have a real choice to do that with smarter products. But the license and everything is kind of means to get there.

Paul Spain:
Yep. Is there a minimum age to open an account at the moment?

Sulabh Sharma:
18.

Paul Spain:
Okay, cool. That’s really fascinating. Well, we look forward to sort of following the story through and really hearing around what is next over the coming period. Any comments that you wanted to sort of share before we wrap up? Sort of around the recent report from Commerce commission around what’s happening in the banking world. What are sort of the summary of your thoughts there without us spending an hour delving into it?

Sulabh Sharma:
Yeah, sure. There are no surprises in that report for us. And I think there’s some real benefit of thinking or looking at open banking with a fresh perspective. And it shouldn’t be just about the regulatory for the purpose of regulation, it should be for the benefit of the customer. There’s a huge difference in that. So I think that’s an area where there probably needs more work. But other than that, there were no surprise in Comcom report and we really welcome better regulation. There has to be regulation again, it’s about people’s money.

Sulabh Sharma:
There has to be rules and regulations and ways to do things. But there can be a better mechanism to let new entrants innovate and launch their products in the market and provide value to the customer within the kind of risk, sort of profiles that work to be done. We’re definitely looking forward to seeing more progress in that direction.

Paul Spain:
Yep. Well, it’ll be, I think, a bit of a journey there. Right. And when it comes to banking and, you know, the finance world, things do tend to move at a, at a slower pace, but it’s great to see you stirring things up and trying to move things ahead at a faster pace where that’s probably quite helpful. So, yeah, good stuff.

Sulabh Sharma:
Cheers.

Paul Spain:
All right, well, thanks everyone for joining us here on the New Zealand tech podcast. We’ll of course be back again next week. If you’ve been watching live stream, then of course, well worth making sure that you are following us across on your audio app. Be that sort of Spotify, Apple podcasts, etcetera. And, of course, if you’re listening to the audio, then you can also find us on your favourite sort of video apps. And, yeah, quite often during the year, we will be streaming live, as we have done today, across on LinkedIn, which is probably our main platform. You can follow myself, Paul Spain, on LinkedIn to get access to those live streams. And you can also follow us on YouTube, Facebook and X.

Paul Spain:
So our x stream has moved to my personal account, Paul Spain, just to do with changes there and the way that x works. So look out for that. And on YouTube and Facebook, those should be under NZ Tech Podcast. So that’s us. Big thank you to our show partners, Spark, 2degrees, HP, One NZ and Gorilla technology. All right, see ya.

Sulabh Sharma:
See ya. Cheers.