1092. News: Finally, the robots take over: Starling gets smarter, Stripe buys OpenRouter, and Vis...

0:05 This is fintech insider news. This week, stling to release weekly smart tools that supercharge money management. Stripe agrees $7 billion takeover of AI firm Open Routter and Visa and Mastercard back new Aentic Payments Alliance. We'll be tackling all of this and more on today's news show. So, don't go anywhere. Running a small business means I wear lots of hats. When I put on my hiring hat, I can count on LinkedIn Hiring Pro to make it easy. LinkedIn Hiring Pro helps manage my hiring workflow, puts my job post in front of a unique network of professionals, and matches me with the best candidates for my business. I can also share my job with my network. No other job site lets me do that. No wonder most small businesses say they'd use LinkedIn Hiring Pro again. Hire right the first time. Post your job for free on LinkedIn today at linkedin.com/quality.

1:09 Hello and welcome to episode 1 192 of Fintech Insider News, brought to you by 11FS, the sixtime consultancy of the year that works with financial providers big and small to build the next generation of financial services. I'm Laura Watkins, director of media and marketing here at 11FS. And to help me unpack the biggest and most interesting stories from fintech and financial services from the past week, I'm joined by a brilliant panel of guests. First up, we have a welcome back to the podcast for David Sullivan, data director at Stling. Welcome back.

1:41 Please, can you remind our listeners a little bit about yourself and your role at Staling? >> Sure. Thanks, Laura. Yeah, thank you for having me back. It's it's great to be back. so I'm David. I head up all of Staling's foundational AI work and our customerf facing AI features and specifically the stalling assistant which is what I'm here to talk about today. So yeah great to be back. >> Absolutely great to have you with us and yeah as you say we will be digging into that very shortly. we have a first time welcome to the show for Stefano Pasquali head of financial services at Domin. Welcome to the show. Can you tell us a little bit about yourself and your role please? I thank for having me here. I lead in the software part do in specific financial vertical government defense and manufacturing and I am like David the physicist borrowed to data science and many years ago and I'm and we are focusing on sovereignty in in AI application.

2:40 >> Fantastic. Well, highly relevant to what we're going to be discussing today. So, thank you so much for joining us. And last but not least, we have a welcome back to the show for Aditi Subarav, financial services at Snowflake. Welcome back. Please give us a little bit more of an introduction to yourself and Snowflake. >> Thank you, Laura. And it's always great to be back and I think especially with Stfano and David, it's going to be fun today. I am part of Snowflake's financial services business. Snowflake is the AI data cloud where we help organizations of all various sizes use all of their data from across sources, types, clouds, regions to aggregate, analyze, and then activate that data so that enterprises can actually adopt and scale AI in a secure and governed manner. So that's what I've been up to with many different financial services customers over the last few months and looking forward to talking about some of that today. Brilliant.

3:40 Thank you. So yes, I have a fantastic panel of guests all with highly relevant skills to help me unpack today's story. So let's get started with our first one which is that stling to release weekly smart tools that supercharge money management. Staling has launched a new suite of AI powered smart tools within Staling Assistant with plans to release additional tools every week. Staling Assistant is the bank's agentic AI financial assistant, allowing customers to use natural language and voice prompts to carry out banking tasks, including setting up transfers, creating spaces, and analyzing spending.

4:16 The first smart tools include a tax saver formemes, a making t tax digital guide, and a spending quiz designed to help customers better understand their spending habits. SC Starling is also inviting its 5 million retail and theme customers to suggest new smart tools for its AI team to develop. The bank says the tools available at launch were requested by customers. And in the future, Staling plans to allow customers to create their own smart tools using its open APIs, enabling more personalized versions of Staling Assistant. So, naturally, David, I'm going to come to you first on this one.

4:52 I imagine this has been you know, your baby for some time. congratulations on on launching this. Can you can you tell us a little bit more about it and and sort of how significant it was that the the customers kind of shaped what you've initially launched? >> Sure. Yeah, thanks Laura. So yes be working on selling assistance. So we we conceived the idea to build the assistant actually about a year ago to this date and then we launched it March 20th and so it's been super exciting actually since launching to see how people engage with the assistant. We were the first to market with an aentic assistant in the UK. So it's been interesting to go on that journey see how people use it what works what doesn't. I think you know in terms of kind of the the value that AI gives and things like that I think it's different for everyone is is what we've seen at the moment. Some people love it for the simplicity of navigating the app. So the assistant can deep link you to different parts of the app. Say you want to find your statements. We've all had that frustrating experience where you're told to leave the chat, click here, click there, and halfway there you kind of forget forget where you're going. So the assistant could do things like take you straight to where you need to be in the app. And so for a lot of our customers, that's how they primarily use the assistant. But I think, you know, others are also using it to help with their budgeting and understanding their finances, hence things like, you know, introducing the the smart tool for spending quiz, which is a bit more of a kind of fun, engaging way to understand your spending. so yeah, and and that's what we've been hard at work at since launch really is just understanding how we turn some of these experiences into into things that actually solve day-to-day problems for customers. And how did you decide which two to kind of or which two or three to to start with the tax savers formemes the making tax digital and then the spending quiz you know we we heard that they were requested by the customers but how did you prioritize those particular ones?

6:46 >> Yeah so you know stling we're really fortunate we have quite a disproportional share of theme market for a bank of our size. So you know we have a very healthy kind of customer base ofmemes. So we we never wanted the assistant to be something that kind of purely serves retail customers. We always wanted it to also be able to assist business customers with their kind of unique needs. And you know we know there's a lot of change going on at the moment around making tax digital.

7:08 Darling's also acquired a company called Ember that provides a kind of suite of digital accounting tools. So, so really it's a perfect opportunity for us to kind of lean into that angle and and provide some assistance through AI which can genuinely help with solving some of those common business banking kind of everyday friction points for customers. So again with the changes going on at the moment making tax digital was the obvious starting place and we hear a lot of kind of feedback from customers in terms of they don't really know necessarily where to start with making tax digital. So hopefully by releasing a tool, it also kind of draws back the curtain on what the assistant can do for you, right? And it can actually do these things. and then the spending quiz that that run again we we see a lot of use of the assistance as we launched it around these sorts of spending related queries. How much have I spent on coffee over the last month and and you know my shopping bill and things like that. And it it's this it's been a the spending quiz was a bit of a a pet idea from our our CIO Harriet Ree at the time where she she really loved the idea of a quiz that kind of drew you in in an engaging and fun way but really kind of tested well how well do you really know your finances and your spending right so it's something that we've kind of wanted to bring the to the system for a while but the launch of smart tools just kind of really really made that possible so that was a logical place for us to start kind of on the spending journey.

8:27 >> Fantastic. and then kind me through some of the the sort of later aspirations. So, Agentic AI that can actually carry out banking tasks on behalf of customers. kind of talk me through the move from AI that that gives sort of financial information to AI that can actually take action here and and sort of where's the the sort of value for customers there? Is this something that they're asking for? Are they, you know, is it just a natural evolution of the product? Yeah, sure. So, I think we we know that AI adoption is is still relatively low, right? generally speaking, depending on what kind of age range you look at, if you look at your gov data, we still see there's a lot of disparity in kind of AI adoption across the country and especially in financial services, we know that there's really range in kind of trust and buyin for consumers in AI. So, we know that that's something that's growing.

9:21 It's maybe something that's not necessarily there today, but we anticipate kind of in the short to to medium term over the next couple of years, we we expect that as people use AI more and more in their their day-to-day lives that it's something they also look to help with managing their finances and their banking, right? So, it's something that is a little bit of a bet on the future. but obviously it's an exciting technology and lots of banks across the sector are trying to are trying to develop in this space. but when we launched an energetic AI assistant, it was really important to us that it actually delivered that agency, right? I think, you know, chat bots are relatively common place in the market. We've all had an interaction with a chatbot.

9:59 but for us, we really wanted to take it to that next step and have the assistant be able to do things on your behalf. So, we started with some relatively lowrisk actions it could carry out on your behalf. It can can manage your car controls. It can help set up a space to save for a rainy day or a holiday, right? And it can even help you move some money into that space either as a one-off or on a recurring basis. And and that's great. And those kind of small bite-sized piece of functionality is something that we we're constantly looking to expand the capabilities the assistant has at its disposal. But what we've seen since launching it is, you know, users when they open the assistant for the first time can get a little bit of prompt paralysis. They don't necessarily know where to start or what the assistant can or can't do. and so that's what we're trying to solve with the smart tools. these kind of intuitive contextual entry points that clearly show that they're going to solve a problem like you know the spending quiz is a good example of you know what it's going to do it's going to go dive into your spending habits one of the smart tools that we're working on for theme customers is a tool to pay an invoice and so that tool would ask you to upload a PDF of an invoice it would then create the pay for your for you on your behalf with your approval it would stage the payment and once it makes the payment it might attach the invoice as a seat and then it might also then integrate with our Ember accounting APIs and do all the digital accounting for you. Right.

11:18 And that that's again using AI to solve genuine problems for customers and friction points but in a way that when you open the assistant it's clear what it's going to do and that it can do those things for you. So that's that's really what we're trying to solve with Smart Tools is is peel back that curtain as I said on on exactly what it can do. >> For sure. Thank you. and Stefano maybe coming to you to bring you into this. where do you think a denting AI can add the most value in everyday banking? Do you kind of agree with the entry points Dave is talking about?

11:50 is it sort of budgeting saving admin or or or somewhere else? What's your take? >> I I was saying that dominance side of AI. you this is fundamental component of sovereignty. So I think the application in banking will scale up in term of impact the more we increase governance and trustability of the system and so I see a lot of impact for individual productivity customer support like David was mentioning but when we go to execution can be opening a loan or executing a trade for an investment bank I think more governance more harness is necessary you in order to to use AI in mission critical application. And so I think this is the direction there is still according to me a gap that in India are trying to solve how we can inject highly auditable and industrial AI in a decision-m process when we are going to miss critical application >> fantastic and and ad kind of coming to you sort of thinking about that that sort of future state does AI sort of change how quickly banks can develop and launch new customer features and and sort of what does that mean for the industry when when AI allows them to sort of experiment with these tools and how you might want to use them and and and get everything kind of stood up at pace. So I think that is a very interesting shift which is now starting to happen and we have quite a few examples now of Revolute or of Nat West launching access via chat GPT etc where historically when a bank wanted to build a new product or a new feature or a new capability within their app it would take months and months of building first to design it then to get it approved then to actually build it then to release it. That shift that has now started happening is banks are starting to think and act more like technology companies or software companies where you have a release every quarter, every week, every month like Starling David, you're you're planning on a weekly release of new features. So I think the first thing is that mindset is shifting and AI is very much the mechanism for that mindset to shift. The capability now exists but the interesting thing here in my opinion is twofold. Until now, we've sort of been looking at AI as two separate avenues.

14:22 One is AI for software development or for tool building and application building. And then the second piece which was thought of slightly differently when used in banking is the AI for the analytics, the AI for the intelligence. You have all this data, AI can now give you insights on that data and then you can understand so much more and you can personalize solutions and so on. This move which David you are a classic example of is the bridging of those two things. You have the capability to give customers the information that they need and the insights that they need across all of their data and you are now using the same AI to give them access to those insights by building something themselves. And I think those two things are what is now going to start that flywheel. it is much easier and quicker to build. But also because consumers will now see the value of building those things themselves, they are likely to stay more engaged. They are likely to keep asking more questions. They're likely to keep using the app more and therefore building new things. So it's almost like the starting of a virtuous cycle. obviously within the guard rails and the frameworks that Stefano mentioned and therefore I kind of think of this as almost a tale of two halves.

15:35 One is the front end and one is the back end. And the way I see this scaling safely is the back end should still be very static, very not static, that's the wrong word, but very institutionally owned. It is Starling's job, it is Natve West's job, it is Revolute's job to make sure that the basic infrastructure and the foundation on which any of these smart tools are built still stays extremely secure, extremely governed, extremely compliant. And then only the front end like I change the face on my digital watch or like I change the pictures on my phone app that is something the user should be able to do very quickly but the back end still stays robust and that's kind of how I would see this phenomenon evolving.

16:21 >> Amazing. I mean, we're we're very much almost out of time on on this story, but David, would you like to just give us a quick final word from your perspective on on kind of what Addison just said? Yeah. I mean, just to follow the other the other big thing for us is building trust as well, right? Like we know there's still a big trust barrier to AI, but giving users the ability to to write their own smart tools, but also submit ideas to us and then see that appear in the app very quickly, I think, help build that trust, right? because you feel part of shaping the experience and that's really important to getting people bought in and and and trust that the the these assistants can do things safely on their behalf. Right. So there's still a lot of long way to go on building that trust but this is something that helps with that as well.

17:09 And if I may if I may add one quick comment on I think very interesting point of view is that she mentioned model analytics. coming from 20 plus year of very painful model is management processes in in banking asset management releasing analytics blindly with AI can be a very tricky job. So to to the point before owning a very rigorous process of govern governance auditability is super important because AI very powerful but very dangerous when generating sight and contents change the I watch face is not a big deal but building trading execution is a big deal >> 100%. so yes we will we will draw a line under this one there but David we've we've kind of half given you a road map there. but also yeah, please do come back and tell us more about about how it's all going when as you get more and more smart tools rolled out. but I'm going to move us on to our next story, which is that Stripe has agreed a $7 billion takeover of AI firm Open Routter. founded in 2023, Open Reader provides a single gateway through which developers can access and compare more than 400 AI models, helping users select models based on factors including cost and suitability for different tasks. The company raised $13 million in series B funding in May at a reported valuation of $1.3 billion at the time. Open Road to CEO Alex Atala has previously compared the company's model with Stripe's own approach to payments with both businesses providing a single access point to multiple underlying systems and reducing dependence on individual providers. Separately, Stripe and private equity firm Advent International are reportedly still pursuing a $53 billion acquisition of PayPal, although PayPal's board has raised concerns around the value of the offer, financing, and the likelihood of regulatory approval. So, Stefano, I might come to you first on this one.

19:12 Stripe has built its business by making complicated payments infrastructure much easier for developers to access. open rooted by their own kind of standard is is trying to do something similar with with AI is this a sort of natural partnership meeting of minds between these these two companies what's your take >> I think so is a very natural evolution stripe the whole business is sit in the middle of a transaction take a small fees out of the transaction so now this decision we allowed basically from payments financial infrastructure and making a link with the the economy infrastructure. So I think is a is a very natural step. One thing that you thought to highlight that switching between models with with the with the with the router is one thing owning the the the inter model is another thing back to the governments before but I think is a natural evolution for the business model >> for sure and and what was your take on this obviously there's you know up to 400 models as as I read that are available here as that kind of you know continues to grow you know what's the the sort of the value of the the layer between the developers and and the kind of AI models and you know is it important who owns that?

20:35 >> Yeah. and you know Laura over the last 6 months to one year a lot of the narrative around AI especially in enterprise AI has shifted from that initial experimentation and go allin and try as much as you can narrative into the how do you optimize your usage of tokens narrative because people have started blowing through their budgets. that whole era of token maxing is over and more and more institutions are starting to realize that they need to get a lot more aware of the costs and the impacts of the way they're using AI and what they're using for. So therefore in the past where nobody would blink an eyelid about like they say again another cliche using a sledgehammer to crack a nut from an AI perspective these days people are starting to get a lot more aware of do I actually need such a large model to do the small job that I need to do amongst those models as well is the one from open AI a better one is the one from anthropic a better one should I should I go to some open-source model somewhere else are the Chinese models a lot more effective so all of these questions and conversations have started coming more and more often and also becoming more and more important within the AI world in any case and in that situation when you give a service which automatically decides what the most optimal routing is that is extremely valuable not just from a commercial and financial perspective but also from an overall process efficiency perspective because if I do know that a new model is released which is much more adapted to the specific task that I want to do it's going to save me a lot of time and effort in doing that as well not just the money. So I think that power is something that is extremely valuable but the other interesting thing here is that by now operating open router stripe have that data and that information of where all of this is getting rooted. It's like having an entire database of where payment flows happen across the world. you have now a database of where where AI tokens happen across the world to which models with what frequency from where and therefore it gives them so much more control over a making revenue from that AI infrastructure like Stefano said but also b of futurep proofing their own business model in the new AI economy.

22:54 >> Yeah, that's that's such a great point. I think David you were you were nodding as as Ady was talking there sort of back to the earlier point about sort of financial services companies becoming tech companies ultimately and you know the what's particularly interesting here is like the the the premium that Striper prepared to pay for this company as well which you know not that long ago was valued at sort of less than a quarter of the price. so David, what's your take on sort of to to add's point about like the sort of overarching value whether monetary or otherwise that that Strive is seeing here to kind of bolster their business model.

23:32 >> Yeah, I mean to build on's point I think you know there's there's one thing in in the valuation of kind of the actual open router operating model itself and the technology behind it but as you said the data that they have right it's you know data is the new oil in this world I suppose. So how do you how do you put a price tag on what is arguably the hottest commodity at the moment right AI. So I think probably that that is what's driving a lot of that reported price tag >> for sure and and Stfano kind of looking at it from the other side as well sort of payments companies are investing in AI AI companies still need the things that Stripe does right so payments billing financial infrastructure you know how kind of interconnected could these two ecosystems be >> it seem seem to connected and clearly stripes now to the point before is on the the control point where AI is consumed and measured. So this is a unique for for position in the as I mentioned before and can be definitely a become mainstream in the market. Now I I still think that be able to route between models is very different that controlling the asset and we if we go back to application on in very sensitive misc application like payment I think the stariness part is very important to to take into account. but definitely the ability to route in with such efficiency mounted the financial infrastructure is a is definitely a insane business opportunity that they have for sure.

25:13 >> I think on that billing point there's another thing to think about which is a few months ago or last year I don't I don't exactly remember when Stripe also acquired another company called Metronome which does billing for AI. So now they are effectively doing both the invoicing and the billing and the collecting of the money for something that they are now routing to different companies. The other angle here is all of these model providers that open router will then be by default choosing between are big customers of stripe for their own separate billing needs. So does that somewhere create friction or tension for Stripe where they are the people charging money for the billing for a company that they're telling we're not channeling tokens towards. So I think there are quite a few questions within this deal and I'm curious to see how it all how the dust settles.

26:10 >> Yeah, for sure. I think that's very interesting. On the one hand, Stripe are kind of like a a magnet kind of pulling all of these big companies towards them. They're making huge acquisitions. I mean, you know, I should say at this particular moment, this one has not necessarily been confirmed. It has been you know, rumored that they are they're making this one. Equally, they're sort of still pursuing that that PayPal takeover, which obviously shows the scale of their ambitions, whether it whether it comes to pass or otherwise, like, you know, that is is is sort of showing where their head's at at the very least. So, yeah, it's kind of it's kind of making a statement if nothing else about how big they're prepared to to kind of go, I think.

26:51 I think they are, yeah, just making an enormous sort of infrastructure play all over the shop at the moment, which is sort of, you know, going back to like that moving beyond fintech into just broader broader tech. kind of what's your take on that, Adity? So I was just thinking as you were saying this Laura that until now the payments were being made by people going forward payments are going to be made by agents. When agents start making payments effectively the currency that you're using again historically the currency we were using was fiat currency maybe now recently some stable coins etc. in the future once agents start making those payments.

27:33 Yes, they will be predictated on currency, but there will be so much more usage of AI and so much more exchange of AI tokens that will happen in the background and between this perhaps stripe have realized that the percentage margin that they get is much more from those tokens than from genuine currency transactions and therefore maybe it's about keeping the same business model but changing the asset on which that business model operates. So I think it is very much an infrastructure play but for the infrastructure of the future economy rather than the the current economy. Yeah, that's such an interesting point and kind of backs up your earlier you know theory that they're sort of just future proofing their business model as much as they possibly can as well. Stefan, what's your what's your thoughts on that? I think I mean there not much to add but yes I think the the currency I like the what did you mention the currency of C token as a currency and we see more and more in financial services as well the tokenization of data as well that is becoming another important part. So I think what from the financial infrastructure we go to an AI common infrastructure and all this thing we will we play important role in next couple of years. I I we see a lot of needs of digital asset the the tokenization of data that are ramping up in the financial services that is double down and and reinforcing what was saying before.

29:08 >> Fantastic. So we we want to see other example I think in on on on the sales side in particular of thing like this. >> Absolutely. well as I said this deal has not yet gone through so we will keep an eye on it. but you know it it would appear likely. so we'll keep an eye on it and see where it develops. But on that note we're just going to take a quick pause here. Back very shortly.

29:32 >> Here's your report. >> Oh thanks Jane. I wish I could hire someone just like you. >> Try LinkedIn Hiring Pro. It's more than a job board. It's like the recruiter you always wished you had. Hiring Pro uses real-time insights to match your role to LinkedIn's unique network of professionals and delivers a short list of best fit candidates. You'll spend less time sorting applicants and more time talking to the right people. >> Let's do it. You're irreplaceable, Jane.

29:55 But another you would be great. >> Hire right the first time. Post your job for free on LinkedIn today at linkedin.com/quality. The new Red Bull Dragon Berry Energizer is now at McDonald's. Made with freeze-dried dragon fruit and made to lock in. The allnew Energizer now at McDonald's. Before we get back to the news, we wanted to tell you about our next After Dark event, which is now just over 4 weeks away. Fintech Insider hosts David Breuer and Kate Moody will be joined live on stage by special guests to record this very podcast and break down the biggest news stories of the week.

30:37 It's taking place in London on Thursday the 17th of September and tickets are available now at 11fs.com/dark all one word. There's also a link in the show notes of this episode below if you want to be part of the fun. Don't miss out. but now back to the news and our final main story this week is Visa and Mastercard back new Aentic Payments Alliance. The story in Finextra. Visa, Mastercard, Fiser, Circle, Salana, and Remittly are among more than 25 companies joining the Agentic Payments Alliance, a new industry coalition focused on developing standards and frameworks for AI powered commerce. The alliance has been created by stablecoin payment platform RAIN and will operate as a working coalition governed collectively by its founding members rather than being controlled by a single company. Its early work will focus on shared research and frameworks testing standards for agentic identity and authorization and regulatory questions around AI agents making transactions on behalf of consumers and businesses. The initiative comes as companies prepare for AI agents to move beyond recommending products and services towards completing transactions themselves.

31:51 Okay, so this feels like it's sort of backing up a lot of what we've been talking about up till now anyway around sort of companies preparing for the future AI agents being able to shop and transact for us and then what kind of is needed in the background to to safeguard it for us. kind of allergy was your initial take on this? Why is why is a coalition like this so important or indeed do you think that it is maybe the first place to start?

32:20 >> Yeah, absolutely. And the answer to that Laura is 100% yes. Like a coalition like this is absolutely important because I think there's two things here which are important to focus on. The first is a common agreed and shared framework for any of these transactions to start happening. So for any kind of agent eiccommerce any kind of agentic payments you need to have a common framework on which all the participants in the market agree and this coalition is a step in that direction. And what is very encouraging and interesting is the fact that the instigator of that coalition or the catalyst rather to have a more positive spin on it is a company which is much much smaller than the other behemoths that it has then brought to the table. So rain is a relatively small company. The last funding round they raised was just 25 million but then they've then gotten Visa and Mastercard and all of these people to come and join that. So that is an extremely encouraging sign. The second part of it which I didn't want to talk about is in order for large changes of mechanisms also or operating methodologies to happen across the system. You've always had coalitions that have to come in to do the work and interestingly those coalitions are almost invariably competitors partnering and collaborating to create that baseline from which everyone works. So if you think of the the KYC framework set up by banks in Scandinavia invid invidm and bank ID it's exactly the same principle. If we think of any of the internet's protocols like HTML like HTTP etc. It was essentially competitors coming together to create those. It's the same thing with any data and governance frameworks. It's the same thing with open source software. Unless you create that baseline for the entire market to operate off, you are not really going to get the same level of scale and adoption that you need to kick off an entirely new market space effectively. I think that is exactly what has started happening here.

34:31 Amazing. And yeah, as you say, like it's sort of it's definitely headline worthy when you hear Visa and Moscow doing something together. I so I think that's that's kind of part of it. and and shows how seriously they're sort of taking this this coalition. Stefano, what's your what's your take on this in terms of the the kind of interoperability the sort of having bringing together of all of these big names to try and put some sort of industry standards in. I totally see the the point as mentioned before creating a common infrastructure where we can build the innovation and I can tell you that there is a lot of similar initiative happening in the financial industry non necessary payment that are ramping up they're under discussion because if we don't define a common protocol in term of platform steps governance authentication protocol how we embed current legal compliance protocol or inside the legend AI this thing will never fly in in a compliant way to regulation and so is absolutely need in every segment of the financial industry and we're going to see more and more this consortium we saw this in the in the past with data providers we saw this in in the past with a lot of trading platform and we're going to see happening now more and more because of the needs of the adoption of AI in this pro business protocol For sure there's just an example that comes to mind which I wanted to chat about. You know in the for any kind of AI or AI agents to work the principle always is the data that they work across has to be good data, comprehensive data, reliable data. However, if you look at the move to the cloud that has happened in financial services, especially kind of during and after the COVID era, you still have the hyperscalers. So the Googles and the Microsofts and the Amazons of the world that are relatively closed in their own universes in their own landscapes, they each have their own separate offerings for everything across the stack from data storage to governance to AI tools and so on. The biggest challenge that organizations face at the moment is that they don't talk to each other so well. And therefore, as a large multinational bank with a multi cloud strategy, my struggle is how do I get all of my data together?

36:59 Now, in something like this, the the analogy I think of is I don't know 30 years ago when you wanted to book a flight or when you wanted to travel somewhere, you'd go to a travel agent. I think the travel agent would then pick up the phone to one airline, ask them what flights they had and at what time and give you a printed ticket for that one airline. You would have no idea what other airlines are doing, what prices they are, where else they're flying, what other destinations. Can you optimize by by clubbing together two different airlines? We can do all of that today when you go to a kayak or some sort of travel supermarket kind of website. And I think that is the change that is starting to happen now in the payment space with this kind of interoperability where even though they are different payment trails, even though they are different kind of providers of perhaps similar infrastructure, the moment you let agents lose across that landscape, those agents are going to try to optimize everything as much as they can. They're going to optimize the payment hops.

38:00 They're going to optimize interchange fees. they're going to optimize the settlement and FX rates that they get and you can only achieve that true value of optimization if everything is interconnected. So I think that's kind of how I see this this change happening. >> Yeah, for sure. I mean David was you were sort of nodding along there with the the sort of travel agent analogy there. what's your your kind of take on this and in terms of you know particularly future proofing towards agents sort of operating on our behalfs essentially. Yeah, I think you know definitely double down on all the points ton already made right. I think also from a purely technical perspective if if you don't have that kind of consistent protocol and set of interfaces then you know we AI has come a long way and there's incredibly sophisticated models out there now but even those if you don't give them a consistent landscape of protocols to work with they they won't it fundamentally won't work right and I think this this kind of alliance is is really evidence that if if this market is to grow and age commerce is really to take off then actually that all these payment provider they have to come together and come together on a unified protocol, right? It's the only way this is going to work. So, I think that's the first thing. But yeah, then in terms of trust, I think as consumers, you know, dispatching an AI to to buy something or spend your money on your behalf is is a huge thing. We talked about building trust earlier on, right?

39:26 You know, everything we've talked about so far in this podcast, we've not even come close to the idea that AI would spend your money on your behalf. So, the work that needs to go into building the trust and making sure that it's transparent. I think if if every provider had a different flow for that, it's going to be a very disjointed experience for consumers. And so that's also not going to help with that kind of picture of building out trust.

39:45 >> Yeah, that's so true. and and Stfan, what's your your take on that kind of trust element and the kind of consistency in the experience leading towards that? >> May maybe as you notice from my communities, POSA for me is all about trust. in Domin we we did a lot of research we published 20 something paper in a year about 90% of them they were about trust I still think that in having a ti penetrating this mission critical regulated processes we still need to remember that we are dealing with the probabilistic technology is in model is probabilistic approach and we can be probabilistic we have to determinist istic engineering transaction portfolio construction loan valuation etc. So I think the the need of keep on investing in audit trail a live evaluation. This is not a problem that we solve if you putting a stamp on the model and an agent that does a good job once but has to be a live monitoring of the of the behavior of the agent in particular for application. So I the typical example we we published a paper last year about positional bias language model where you ask giving all the analytics and model and you can you can have available you you ask an agent which is the best investment between Tesla and Microsoft you tell you Tesla in a very compelling way same prompt you invert Tesla you tell you Microsoft so basically his bias to choose the first asset security mentioned in the prompt so these are any one of the thousand example you can do where if you don't build a very strong protocol to control the behavior of this model you build infrastructure we are getting there now we are building the business cases but in the middle we have to be we need to build a very strong auditability protocols otherwise this thing will never fly and we create operational risks.

41:53 >> Absolutely. And then finally like how does that sort of then translate towards the consumer? So you you've got everything sort of set up in the back end so that like you know it's secure but how do you convince me as the customer that that it is in order that I trust it to transact for me? >> That's a very good question. I personally think that trust will come over time. and to I think David the beginning mentioned that the sophistication and how aggressive and penetrating is the business case has to come over time. First you start for simple one then you gain trust on simple one and you keep on evolving the the complexity the sensitivity of the business case. I think that's the only way. But without the technology and the tools, without the MRI machine, the scan, the the the aging behavior, I don't think we're going to solve the problem.

42:47 >> For sure. David, you're nodding. Anything to add to that? >> Yeah, you know, it's it's something like we're acutely aware of and it's with our system. We started with the ability that you could move money around within the account and now we're about to introduce the ability that you could transfer money between other stalling accounts you own and then that' be a stepping stone to external payments, right? But it's I think you've got to take that one step at a time. If you were to come out all guns blazing with you can instruct agents to make payments on your behalf, people aren't aren't going to go for that. So I think it's all about incremental steps kind of get people used to using the technology that what the experiences are like and and to Stephan's point as well, wherever possible, you know, give that insight on what's going on under the hood to make sure it's as transparent as possible.

43:29 There's a lot of work for us all to do there. Do you find David that the ability to build those apps and tools themselves is a step in the direction to getting them more comfortable with the AI? If I've built something, I am likely to trust it a lot more than if somebody else has built something. Are you seeing that change in usage, in behavior, in loyalty from your customers at all? Is that something that you're monitoring like from the pre-build days and the post-build days?

44:00 Yeah, absolutely. End like we as a team that built it like we'll go in and use the assistant to do all manner of things, right? But again, yeah, we have that advantage of well, we we built the outside of that MRI machine and we know how it all works inside. So, it it is super interesting to see actually. We've we've been kind of pleasantly surprised. We honestly didn't know how it would be received when we launched the assistant and it had the ability to even move money within the account. Even the idea of moving money to spaces, we didn't know how people would would go for that.

44:27 But actually we were really surprised to see that within the first few months and 95% that were shown that request for confirmation of you're about to move money do you want to approve this 95% of people said yes right so that that was really interesting to actually see that but when people got to that part of the agentic flow actually they were quite comfortable to instruct the model to do it whether that translates to payments between accounts or external accounts is yet to be seen right but for sure we thought there was more work we would have to do to even get buy into moving money around the account.

45:01 >> It's like I'm a lot more likely to eat food that I've cooked myself, even if it doesn't taste good at all than from an unknown restaurant, maybe. So, yeah, fair enough. >> And I I think that's actually I think you you kind of hit the nail on the head. That's a really important part about building AI, trust in AI, is I think, you know, a lot of people if they're using these tools, if the AI is making decisions on their behalf and asking permission, you're a lot more likely to say no because you don't feel in control. Whereas actually the psychology of of all this is if if you have the idea, you're a lot more likely to kind of go along with the recommendations that the assistant if it's kind of reaffirming the original idea you had, right? We saw this for example with the one of the first customerf facing AI features we launched with something called scam intelligence.

45:45 We could upload a picture of something you were going to buy online, say eBay or or social media marketplace and you could upload the image and it would just tell you the red flags of any potential scams. And we saw that people that used that tool were three times more likely to not proceed with the payment versus if you showed the usual kind of payment screens which were like, "Are you sure you want to do this?" Like people usually just click through those and once you're in the position of no, I'm going to make this payment. As a bank, no matter how many screens you show warning, are you sure? People are just going to more often than not proceed through it. Right? But if you actually you you're given that information about the red flags and you make a conscious decision of oh I'm not sure about this that psychology is a lot stronger.

46:26 You're a lot more likely to go on the recommendations of the AI. So I think there's a lot of that as well to to actually building trust and engagement in these tools. >> For sure. I think we've come full circle. There's so much like human behavior that needs to be factored into into how the technology is used as well. but on that note, we're going to take another quick pause and we'll be back very shortly. >> Here's your report.

46:54 >> Oh, thanks, Jane. I wish I could hire someone just like you. >> Try LinkedIn Hiring Pro. It's more than a job board. It's like the recruiter you always wished you had. Hiring Pro uses real-time insights to match your role to LinkedIn's unique network of professionals and delivers a short list of best fit candidates. You'll spend less time sorting applicants and more time talking to the right people. >> Let's do it. You're irreplaceable, Jane, but another you would be great.

47:18 >> Hire right the first time. Post your job for free on LinkedIn today at linkedin.com/quality. >> Okay, now for a quick look at stories we don't have time to cover in full. And this week we're looking at Soul's financial watchdog targets AI hallucinations. The story in Fintech Global. South Korea's Financial Security Institute has developed the country's first dedicated evaluation framework for assessing the reliability and safety of AI used by financial institutions. The framework is designed to address risks including AI hallucinations, model errors, bias, security breaches, and unreliable outputs as financial institutions increasingly deploy AI across core banking functions. The framework draws on existing South Korean regulation and guidance as well as international standards including ISOC420001 and tools developed by the UK AI Safety Institute. The Financial Security Institute plans to begin pilot testing in the second half of 2026 with full evaluations expected to start in 2027 initially amongst its member financial institutions.

48:28 So the Korean market is not one that we cover very often on this show. even though it's very easy to imagine them being a very tech first market. So it's good to see them leading from the front here but also drawing on local data and regulation as well as looking further a field for inspiration. obviously sitting here in the UK as I am it's interesting to see them choose the UK AI safety institutes tool in particular.

48:51 and what they're looking to do is is assess AI systems across 10 criterias in two areas. reliability and safety. Reliability covers areas such as model performance, data quality, fairness and bias and the ongoing monitoring of hallucinations and performance degradation. And the safety assessment covers areas including AI specific cyber threats, protection of AI assets, third party models, supply chain security and leakage. So obviously when you're talking about AI, the best things you can do is make it reliable and secure.

49:22 and they are launching this in early 2027, which probably can't come soon enough at the rate that AI is being used as discussed in basically all of the stories in today's show. so it'll be very interesting to see if other markets follow suit and or borrow the same frameworks that South Korea are laying down. So, we'll keep an eye on this one and see how it evolves. And now I'm going to move us to our and finally section. Oh, and finally this week is £173,000 of government spent on influencers a good value for money exercise. So the story on the BBC, the aisle of man government has spent 173,000 on influencer marketing over the past 5 years. According to figures released following a freedom of information request, visit aisle of man has used social media creators to promote the island as a tourism destination, arguing that influencers can help it reach audiences that might not be reached through traditional advertising. Around $35,000 of the total was spent hosting influencers on the island with that money going towards local tourism businesses involved in producing the content. Australian travel creator Daniel Herzburg, who has more than 68,000 Instagram followers, visited in 2024 and said content from the trip became some of his most viral that year.

50:37 He also said that people have contacted him saying they have subsequently planned trips to the island. the spending has prompted debate over how government should measure the return from influencer marketing and whether authorities should instead work with local creators who already promote their destination. okay. So, what do we think on this? I think you know influencer marketing is very increasingly popular. You know we've seen so-called influencers and celebrity crypto endorsements.

51:10 you know what do we what do we think of this? Is this a a good use of government spending? does anyone have any strong thoughts on this? >> No, it's not my set of expertise. So I can use the common sense here and I think in my small experience in processing with AI social social media data I think is very easy to understand the traffic about some influential activity is very difficult to do the attribution and so linked to the real value that's my only comment I can make it not being an aspect on the field but from the pure data science perspective I notice that is very difficult the physical attribution of their term of >> that's 100% the biggest problem with it.

51:58 I think you can spend such a lot of money and you don't know if it worked. you know the fact that they're highlighting kind of qualitative data that somebody told the guy they they've gone ever since seeing his post but other than that they don't know. it's a it's a difficult one to to kind of show return of investment for sure. >> I actually led the the principle behind it, the fact that the aisle of man government thought about doing something else and they're open to non-traditional, non-governmentlike ways of promoting tourism. I actually think that's a great thing. if you if you think about that number also across 5 years, it is not really that big a number. it's maybe the salary of like a one person who would then spend time marketing and spend time kind of doing the traditional ways of promoting tourism over there. So from that perspective, as long as the return on investment holds up, I think it's it's something that should be both admired and perhaps built up a bit more the right way rather than dismissed out of hand because it's unusual. That's a that's a an interesting perspective.

53:17 And yeah, like kind of yeah, 173,000 over 5 years is not an enormous marketing budget. Exactly. >> Let's be clear on that. David, any any strong thoughts on this? >> I guess on the theme of the podcast, yeah, I', if it was mine, maybe I'd spend it on tokens, but again, I'm not sure. 173,000 over 5 years is a terribly great token budget these days either. So, I I'm not sure how much return you'd get on that. But, >> but I now need to go and find videos from this Daniel Hburg guy to see what he actually did.

53:51 >> He came all the way from Australia to the island man. it it it ought to have offered him something good. I think I wonder if he was disappointed when he got there. Maybe >> you know that's there's that other angle also where like in financial services also we know for example that a majority of Gen Z are getting their financial services knowledge from Tik Tok >> for example. >> I wonder if there is something to the fact that >> more people are likely to believe him precisely because he is not a local and therefore he might not be biased. He has seen Australia. he has seen multiple other places and then when he says that this place is also good it gives it a bit more credibility than somebody who's obviously from there loving that place talking about it. So that's another interesting angle. That's true. We're kind of back to our like you know our trust and human behavior debate all over again. and that maybe is a full circle moment to to end the show on. So thank you so much to you guys for joining me. where can people find out a little bit more about you and your companies? starting with you, David.

54:56 >> yeah, LinkedIn, please do feel free to reach out to me and the Stalin bank website. We we have a blog on there. We post we have a newsroom. We post whenever we're launching new features. So lots of information there as well, >> which apparently is now weekly we here. So >> weekly for the the smart tools. Yes, we'll be busy. >> thank you. And Stefano? >> Yeah, our website provide a lot of information. on LinkedIn we are very active in promoting themes about trustworth AI AI you you can own and not rent so that we we're very active on LinkedIn and our website and publication we publish a lot of technical paper >> brilliant thank you so much and please find me on LinkedIn message me talk to me and find out more about snowflake at www. snowflake.com.

55:45 Fantastic. Thank you. As for me, you can find me Laura Watkins on LinkedIn on 11fests.com 11fests.com after dark if you want to get your tickets and come and join us. and or otherwise just on this podcast. and that wraps up today's episode. Thank you so much for listening. If you like what you've heard, please make sure you follow us on your favorite podcast platform of choice. and feel free to share the podcast with a colleague or friend.

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