Fintech

Rinat Malik: 00:00:00

Hi, everyone. Welcome to Tech Talk, a podcast where Amit and I talk about various technology related topics. Today's topic is fintech. This is actually a very a topic that is very close to my heart because I am working in FinTech. Amit also had various experience in FinTech industry. Right now I'm actually working for a quite known big bank as well. So and with technology, implementing various cutting edge technologies over there. So yeah, Fintech is something very excited, exciting to both of us and very excited to talk about it today. And I feel like we will have a lot of information that will add value to our listeners and viewers. So yeah, without further intro, let's start. What is fintech? Let's give our audience some definition. Amit, what do you say?

Amit Sarkar: 00:00:56

Yeah. Rinat, Thanks. Thanks a lot for the introduction and yeah, I'm quite excited about this topic. It's close to what we do every day. It's not just work, but in our personal lives, especially in the UK, UK is I think, one of the most advanced countries when it comes to fintech. We have the most advanced types of financial instruments available to the general public, which is quite remarkable. We are actually much further ahead than even America, which is supposed to be the biggest technology hub in the world. So when we talk about FinTech, it's actually financial technology. Now, of course, finance has been there for a very long time and we have done various talks on it. We have talked about CBDC. We have talked about cryptocurrency, you talked about blockchain. And today we wanted to cover another aspect and they are all related to fintech. Fintech is us technologies that are enabling easy access faster access to financial instruments by the general public. So what that means is that suppose I want to take a loan, how quickly can I get it? Suppose I want to open a bank account, how quickly can I do it? Suppose I want to get insurance how quickly I can do that. And can I do it from my mobile phone? So if I can do all that without actually going to a place or without actually going through an agent without actually going through a broker. That's basically enabling a service through technology, and that's what Fintech is all about.

Rinat Malik: 00:02:30

Yes, absolutely. I was just gonna say that. Yeah. As you just explained, fear Fintech is a portmanteau of finance and technology. I think I remember the first time when I kind of came across the word fintech. I was confused. What does that even mean? And I had to google it. But then I found out the huge world of FinTech and how technology is like ingrained or entangled with finance nowadays, and everything that we are in finance is a large industry or large with a large remit to begin with, I mean, it has been historically and how technology has been ingrained or entangled with it is quite fascinating, really, because everything that we do we even if we are doing something that is not directly, even though most of the things we do are now in mobile apps or online anyway, but even if you were to go to a bank, physically and doing something even, even in that scenario, in the background, a lot of technology is being utilized for all the things that you're asking them to do. So yeah, Fintech is it's quite a quite a large industry with so many things happening in the background, that it's, it's just amazing. And, yeah, you've mentioned some of those things like, you know, when we're doing international money transfer, as well as the regular retail banking as well as you know, a lot of people are now into retail stocks with the advent of trading two on two and Robinhood. And you know, like so that and let's not forget cryptocurrency because that's also finance and, you know, technology at the heart of it. So all of these things do come under fintech. And yeah, it's, it's really fascinating to think about all of that.

Amit Sarkar: 00:04:23

Yes. Actually, you're right. And when we talk about technology, it's not like an financial technology. We don't mean that, okay. You had a bank where you could go previously, it didn't have a website, and now it has a website that's not fintech. Fintech is actually trying to solve those problems because even with those online banks, or you say online banking, you still cannot do many things very easily. You need a lot of there are a lot of restrictions. There are a lot of approvals. If you want to just open an online bank account itself, it takes a lot of time. So I had this experience with one of the large retail banks here in the UK. I was trying to get myself added to my wife's account as a joint account holder. And it took so much time and effort that I just like in the end I just gave up and I moved to another bank or digital bank. And yeah, so Fintech is making life easy through technology. It's not Internet Banking. It makes your life easy. But imagine you take it a step further. What if you could do everything from your mobile phone? I mean, it's internet banking, you have to log in, you have to but now you have an app, and you can download it on your phone and through that you can transfer money, you can make payments, you can do so many things. So I think that's the power. So let's start and break it down. In FinTech because there are so many different areas in finance that FinTech covers. So let's break down some of the things and we'll just talk about how technology is enabling it. So let's start with banking. So, Rinat, you mentioned that you're working in a big retail bank in UK. So can you talk about what kind of banking I mean, what kind of technologies is FinTech enabling in banking and how is it helping people?

Rinat Malik: 00:06:20

Yes, absolutely. I mean, apart from my current engagement as well, I mean, I have quite a few engagement in financial services industry with technology implementation. So yeah, including, you know, quite a quite a few names that everyone would know and then there are smaller financial services, companies who only, you know, only a handful of people would not have had the experience of working in all of these different types of financial services, companies and all in all, most of the most of the, in most cases, people are trying to implement newer technology to stay not ahead, ahead of the game, but just to stay in competition because that's how much technology is entangled with financial services companies, because if you're not, if you're not, you know, sort of exploring the newest technology right now. You're not even going to be in the competition. It's not just gonna make you stay ahead of the game, but it's just gonna just make you remain there. So I'm fundamentally in automation. And you know, one of the things that I do for various financial services companies is implement a programme of automation services in their organization. And that's some of the things that I've worked in previous retail banks, commercial banks and some of the things that I'm doing currently as well. And what I have seen over and over again, is the, the kind of the need to streamline various processes. And one of the things that comes repeatedly is the need to sort of so there is there is a lot of opportunity for technology, implementation maintenance and services because there historically there has been a lot of people who are working for various repetitive tasks in financial services. I mean, they are very good at standardizing various business processes and what happens is, once you standardize it, you can you know, you can deploy a lot of resources who would do those standardized tasks. And now with the advent of technology, you have the opportunity to automate these tasks with the right tools and now a lot of businesses a lot of financial services businesses and companies are looking at are exploring how to automate these things and all of these things that we do, you know, with the front end being mobile apps or you know, or desktop application a lot of things actually goes behind a lot of sort of technical operations goes on in the background to make those things happen. I mean, obviously, as a consumer or as a user, you're seeing a transfer happening, you know, with a click of a button but there's so many things that are happening with so many checks. And that's another thing about FinTech as well. I mean, we have entanglement of technology with various industries, like there's ed tech, there is food tech. There's various things that are always have a tech added to the end and that that's new industry. One of the things that's different with FinTech and the rest of the tech industries is that the regulatory and the compliance requirements because financial services industry is very heavily regulated, which may not be the case for the other industries or they might be regulated in different ways but compliance and regulatory requirements very fundamental requirement for all financial operations. And technology allows all of all the Financial Conduct to be audited well, and to keep track of and provide insights on everything that's happening and it also helps prevent crime as well in by the financial services company, as well as you know, delinquent hackers or disgruntled employees. So in many ways, technology is enabling fairer usage for the users of consumers and

Rinat Malik: 00:10:42

going back to what I was saying about the user experience, you know, when you're clicking a button, a lot of things is happening in the background. Some of that includes compliance. So when you're opening an account, as you mentioned that you probably didn't have the best of experience in one bank and then you went to an online only bank and then you had a really good at best because they're utilizing the technology to the fullest. There is always there is already data available from the government about you know, from your driving license number you can pull out a lot of data about yourself to identify you. And then you can, you know, you can connect that with your date of birth or passport number and then they can have a fully comprehensive profile about yourself from a legitimate source which is the government itself and you know, businesses can have these sources by registering themselves as a proper company like the online banks are and through these with the click of a button or within five minutes, they can do the KYC procedure. KYC stands for you know, your customer, and that's a very, very crucial step in in onboarding a new customer and that, you know, some of the traditional regional banks takes days. And whereas it can really be done in five minutes with leveraging the technology that can go behind the scenes, and that's what these online banks are doing. And I had a very similar experience when I when I started contracting, I needed to have a business bank account and I went to one of the top high street banks, and I thought I'll do it that way. But then they had taken two weeks and then I did not get any response after and I felt like I was not being taken care of in a way that that they could and then I had to start my job very quickly as well. And the deadline, the start date of my contract engagement was coming up very soon. So what I did, I went online to an online bank, online only bank and it literally took less than 10 minutes to scan my driving license and my passport. And they gave me an account with the account number and I was ready to go and that is such a big difference and this the difference is so high that it is it has the potential to disrupt the market. I mean, I say potential but they are already disrupting their market because younger people more and more are you know subscribing to banks like Monzo or business banks like tide or Starling. These are some of the names not that were sponsored by them. But some of the names that we've seen and some of them will possibly be used as well. There are many benefits of these online only bank accounts.

Amit Sarkar: 00:13:37

Yeah, I think I think you mentioned these scenarios really well. Because I had a similar experience with an online only bank. I mean, I have used Sarling, Monzo, Revolut. In the UK. I have used HSBC, Santander, Barclays, Halifax. These are the big retail bank Starling, Monzo, Revolut they are the digital only bank so when we say digital only banks it means you cannot go to a store. There is no shop. Everything has to be done through the phone or through the website. There is no customer I mean you cannot actually go and talk to someone physically. Everything is done online. That keeps the cost down. But that also means that they can deliver services much quicker because there is no middleman involved. There is no paperwork. As Rinat mentioned you just scan your driving license or passport and they immediately open so that's eKYC electronic KYC rather than physical KYC where you have to sign everything you have to fill a form provide photocopies of everything they will send it to their headquarters. It will get approved. They will look at your bank history they'll look at your credit history etc. etc and then decide whether they will do or open a bank account for you. So it takes a lot of time. So that's one aspect. eKYC Rinat also mentioned about fraud. So that's so fraud prevention is I think a very big thing. So if you are trying to make a lot of payments too quickly, or you try to transfer a big amount very to a new user, you will get an alert and they will try to authenticate. They will try to ask or give you a phone call to verify whether it's a legitimate transaction. There are anti money laundering regulations. So they will be able to track the money that's being transferred from one account to another and even offshore. So the companies they have now these automation tools that can monitor they have these AI ml models where they can monitor all the data and if your transactions are not in line with your regular use. It pops up an alert and they know that something is different compared to your regular usage. And they'll try to verify by either emailing you blocking the payment calling you It's for your own benefit, because a lot of fraud happens with that. So that's one way where banking is getting transformed. The other ways digital cheques. So earlier we used to go to a bank to deposit a cheque, maybe post office or now you can just scan the cheque and it gets deposited to your account by the next day. That's how quick it is. So I think banking has transformed. Plus. The other thing about online banking and now with the advent of open banking is that your data with your bank is accessible to other third parties, if you allow it, if you authorize it. What that means is that suppose you transact with the big banks, HSBC or NatWest, so Barclays is a UK specific banks see bank, you bank with one of these banks. Now, there is a credit score agency, like Clearscore, or Credit Karma and they want to access your account so they can recommend you financial products like credit cards, loans, mortgages, insurance, etc. So they will keep track of your insurance based on your credit score, they can recommend new products and for that they will need access and you can now give them access. So they will have access to your transactions. And they will have access only for a limited period of time, then you have to re authenticate. But they have access. And it's not just these financial companies or credit score companies but other banks. So you can actually look at your bank balance saved from HSBC in Santander Bank application. So you don't have to go to HSBC application funds to authorize it you can actually view it in one application. So that's the power of open banking and mobile banking currently in the UK.

Rinat Malik: 00:17:48

Absolutely. That's actually so amazing. And this actually brings them back to one of the things that you said in the beginning that how UK is so much further ahead than countries like US or Canada because you know, they have some mobile apps and others other financial systems called like PayPal and Venmo. And, you know, we might sometimes feel frustrated that why don't we have something like that, but the actual reason is we're so further ahead than their banking that we never even needed these financial tools that they had to implement to do their regular banking. I mean what you do with PayPal or Venmo send money to from one person to another. We can do that. You know, just from directly bank to bank transfer. I mean, there are times when I sent like pennies to my friends just you know, make it to just have fun, but you can do that. Without needing a third party application. And that was that was already like 10/20 years ago we're doing that. And now we have even open banking is now kind of like not new news anymore, but

Amit Sarkar: 00:19:03

everyone has an idea to it. Yeah,

Rinat Malik: 00:19:06

yeah. So in my in my Lloyds Bank Account mobile app, I can see if I have an account with Matt restorations BC. I can see all of those accounts and credit cards, details and transactions in one app. And obviously the first thing that you think about what about security, but obviously if you know all of these banks have come together to provide us this technology and make our life consumers life a lot easier. And the question of security and sort of privacy is maintained and that's how they're providing that service. So yeah, it just amazes me how further ahead the UK banking system is and I am quite lucky to do be a consumer of this, of this system.

Amit Sarkar: 00:19:59

Indeed, indeed. And I mean, it's I mean once you have access to mobile bank, and then these credit score your own credit score through say clear score or Credit Karma. It gives you so much access and so easy access. I remember when I wanted to apply for a loan, and I wanted it like by next day, I went to Zopa it's a peer to peer lending. So what that means is, there are a group of people or some people who have money left in their bank accounts and they want to invest it somewhere. So they invest in a company like Zopa and Zopa will give them promised them an interest on their investment. And that money that which they invest is given as loan to other people who pay interest on that loan. Now, the beauty of this is that you apply online and you apply through say clear score or Credit Karma. So these are credit score agents credit score companies where you can actually check your credit score free of cost. So you can open an online account, and you can go there. You can give your details personal details like your name, your address, history, your date of birth, and your mobile number, email address, etc. And they will then pull out all the financial history that credit agencies have on you. And they can tell you if you've missed any payments, or what is the address stored on your file, etc, etc. How many bank accounts you have opened, how many direct debits you have every month, etc. So once you once they have all this information, they can then recommend you products and then through that I applied for a loan in Zopa. Zopa approved it and I got the money. I mean, not next day, it was like instant I got the money in my account, and I was able to use it instantly. And it's not just Zopa. There are other companies that can now provide you loans in your bank account. Like within seconds of approval. So you go online, apply for it, it gets approved, money's in your account, and you can use it.

Rinat Malik: 00:22:04

This is quite interesting. Actually, I didn't I wasn't aware I haven't explored peer to peer lending that much. But yeah, now hearing about you on this, I definitely want to find out I mean not that We're not sponsored by Zopa either, but definitely want to check this out. And the other similar providers like…

Amit Sarkar: 00:22:23

Company called lendable, they also provide instant loans. There is RateSetter and there are many other companies online. I've used some of these so I can personally say that yes, the service is good because once you get approved based on your credit score, of course, they also based on your credit score, they can the interest rate is dynamic. It's not fixed. It's not like everyone will get the same interest rate. It's depending upon your payment history, your credit history, etc, that they will give an interest. If you have outstanding loans, the interest rate will be a bit higher. If you have less outstanding debt then your interest rate will be lower because you are low risk. So these are very, very good ways to get

Rinat Malik: 00:23:06

absolutely no I was more thinking about the investment opportunity rather than taking the loan because yeah.

Amit Sarkar: 00:23:16

Yes, there are many other companies who do that. So yeah, so that's, that's one area where so we started with a bank that we looked at credit score, and now we went to lending. So it's like, you want to take a loan, you want to take a credit card. So that's all related to that. Suppose you want to make a payment so Rinat mentioned that you take the bank accounts, I have Rinat’s bank account and I can transfer money or he can transfer me money. But you might have heard about Paytm in India there are many other companies. And in PayPal, you actually just need an email address. So if you send money to that email address them, the money will reach you. So they will always ask what's your PayPal email, and the money will come to your account for free of cost, of course no transaction charges. And in UK, you can now transfer money from one bank to another bank using a mobile number. So your mobile number is linked because of your mobile banking. So every bank app will have access to the mobile number. So with that mobile number they can link your bank account and with that bank account, they can transfer money, so you can actually transfer money through a mobile number. And it's not just that like transfer buddy within the country, you can transfer money abroad as well. So there is transfer wise and there are many other companies remit I think remit to India remotely. There are I mean, I've used TransferWise and I can vouch for its services. It's very quick. So what they do is you transfer money to their bank account, and they will transfer money to our Indian bank account. How they do that, I don't care. But what I know is that the moment I make the transfer, the money's in my account within two to three minutes. It's that quick, depending upon the time of the day. So that's a game changer. I don't have to wait days or weeks. To get money in my Indian bank account. It's within like minutes.

Rinat Malik: 0025:13

Oh, right. Okay, I wasn't aware of that. Actually. I mean, I was just gonna mention TransferWise because I'm, I'm a regular user of TransferWise as a as a immigrant hustle myself. So I remember back in the days when I used to have like Western Union, I mean, I'm sure they have also implemented technology nowadays, which I haven't explored yet. But back in the days I used to have to go with the cash to a shop or like outlet and then fill up forms and then send the money and then the recipient on the other end, had to take that password or a passport or a scanned copy of the document and then take it and then get the cash which it was so difficult or inconvenient compared to what it is now. And yeah, I use TransferWise and some of the other ones you mentioned like Remitly It's quite popular in Canada, I think, from some of my friends. I haven't used them remotely but TransferWise is, or I think they're now recently called wise. And, yeah, I mean, but I'm actually surprised hearing that you're saying that it only takes a few minutes because my experience still is. It takes one or two days which is still a lot quicker than it used to be before.

Amit Sarkar: 00:26:30

I thought the country because for India, it's minutes, I mean, I transfer to India, so I it could be because of the country to which you're transferring. It could be because there are other regulatory requirements before you can actually transfer. So that's another way where Fintech is transforming international cross border payments, especially like us, we have to send money to the family. And we have to support our family etc. I think it's very important to be able to send money quickly to them without incurring a very high interest rate or sorry, high transaction fee, so wise it used to be called TransferWise. It has now become vice. Thank you for pointing that out Rinat. So what they do is for every transaction, they charge you money, but it's a very small amount. Say suppose you're sending 200/300 pounds, let's say 3000 pounds, they'll charge maybe one or two pounds, or maybe five pounds. Depending upon it.

Rinat Malik: 00:27:34

All sounds a lot better. For India then then for Bangladesh. Actually, I do get charged more than the numbers you're saying. But still, it's much better than what I used to get

Amit Sarkar: 00:27:47

I think it’s more to do with the country and the regulation. And the banking ties that they have.

Rinat Malik: 00:27:53

But in all of these situations, the overall experience for me is improved so much because it's cheaper overall, as well as so convenient that you know sometimes I don't even have to get out of bed. I can just use two apps my mobile banking app and the wise app and then the money is already on its way and you know they're gonna get it in the recipients gonna get it in their bank account so they don't have to go somewhere to get the cash either. Just gonna get deposited in their bank accounts, so it's ready for them to use however they like. Which is completely like a day and night difference and this these are the some of the ways technology is kind of, you know, turning the financial world upside down.

Amit Sarkar: 00:28:37

Yes, indeed. And so, once you have these cross border payments, so you can now move money from one account to another account from one currency to another currency. Now bear in mind when we do a cross border payment, there is a conversion as well. So if I transfer from UK to India, there is a conversion from pounds to rupees Indian rupees, they have a transaction fee, and it is all calculated instantly or on the day or on the minute what the current exchange rate is. They calculate the commission they calculate the fees they calculate the conversion rate they tell you, they show you everything. And you make the transfer and the money's in your account within a couple of minutes. So it is it is actually quite transformative. And I think it's all to do with the user experience. The convenience of doing a financial transaction with such ease because it gives you very less headache. You don't have to worry about it. You can do things last minute. So it takes that burden of planning things ahead, going somewhere doing something maybe withdrawing money from your bank account that also has a challenge because you can only withdraw certain amount of cash per day. So though there are all these challenges as well. And now from payments, if we go a bit further, you have insurance. We talked about loans but then we have insurance as well. So insurance is also one of the financial instruments through which I mean, you cover yourself in case of any eventuality. It could be a home loan, sorry home insurance. It could be your business insurance. It could be life insurance, it could be car insurance, it could be travel insurance. Now all these things are not very standardized. Especially I think in Europe. I'm not sure about other markets. I live in Europe. So I know about the market here. They're very standardized. You can buy insurance online within few minutes. Of course for health, say life insurance, health insurance you have to fill a bit more details because they will ask you about your health history your travel history, etc. Before they can assess the risk and provide you a code of the insurance. What for a car for travel for many other things, business insurance, home insurance, it's very quick. So you have these comparison websites where you can just go buy insurance and you don't have to go through an agent earlier. You had to go through an agent, an agent would come and recommend your product and they will say okay, this is your lifestyle. So this is how much coverage you need. Now you can just select everything online and you will get a list and based on your risk, or your appetite or your say your credit history, you will get products and now you can mix and match you can add something you can remove something you can have an add on etc. So it just makes life easy and there are the all these websites where you can just go compare and buy insurance.

Rinat Malik: 00:31:43

Yes, absolutely. I mean there are so many like sub sectors in financial services. You know, we looked at foreign transactions the insurance and there's retail banking and commercial banking so many and all of these you know sub industries if you want to call it sub it used to be our industry is on its own. But you know all of them have implemented technology and they had to because it can have stock does provide so much benefit. And, you know, it didn't happen overnight. It happened you know, it was a slower transition in the beginning but more and more you know the industry leaders or management or whomever was in charge of decision they saw the benefit that technology brings into these, each of these business processes. And yeah, just not just you know, using a computer for emails at work, but they're you know, so many things where technology can be ingrained within the process and the process can be improved. So consumers are ultimately benefited with time save and convenience. And obviously, you know, so far we've been talking about, you know, our traditional money and how that but then we can't we must not forget crypto that's in the new money that's coming in. That's also finance because it's my CBDC and yet I've recently had this news that when we were talking about we had a talk for our audience who didn't catch that a few. A few quite a few episodes before earlier. We had a talk about CBDC and we explored what it is and what it can do and the potential for it. Recently I saw a news about CBDC where you know some of the some of the NATO countries not necessarily NATO countries but some of the Western countries with quite strong financial standings. Like UK, Germany etc. They are considering sort of starting up is

Amit Sarkar: 00:33:51

not just UK, Germany, there is India, India in their financial budget. They have recently told that they want to look at CBDC they have legalized cryptocurrency purchases. Of course they will be taxes but they have legalized that. In UK you can buy cryptocurrency and you can you still have to pay some tax when you try to sell those afterwards a profit but I think it's all legal. Of course with any investment there is a financial risk so we will not advise you to buy or invest in a certain cryptocurrency please look at your risk appetite and invest accordingly. And we are not recommending any cryptocurrency over any other So do your research and then invest.

Rinat Malik: 00:34:36

Absolutely. And also just add a little bit of another footnote as well. It's not legal in every country. So please do already only do things if it is legal in your jurisdiction. So yeah…

Amit Sarkar: 00:34:51

So I think cryptocurrency is there. Cryptocurrency has its own I think market. A lot of a lot of people who don't have access to a bank account. So normally in the UK, you can open a bank account if you have a driving license or a passport or some kind of illegal document. But in many countries, you don't even have those legal documents. So banks, banks don't want to take that risk. So a lot of people in poor countries or developing nations, they don't have bank accounts. So these are the unbanked people and most of these unbanked people now, if they want to transact, they are now looking at cryptocurrencies. Because you can buy a cryptocurrency just opening a bank opening an account in one of the exchanges. And you can easily I mean, you can ask someone maybe, or you can use some cash, I don't know but you can still buy cryptocurrencies. Once you buy that you can then transfer those cryptocurrencies you can trade that you can invest it somewhere. Or you can just do cross border payments, cross border payments. So you send bitcoin from say UK to say Bangladesh and in Bangladesh someone will receive the cryptocurrency and deal in cash it and they get the money based on the current traded value of Bitcoin or Ethereum or XRP or whatever.

Rinat Malik: 00:36:16

Yes, I mean, they don't even have to convert to money if cryptocurrency is fully implemented in the market. So yeah,

Amit Sarkar: 00:36:24

and banks and governments saw this as a risk and that's why they looked at how they can tackle it in regulated, of course, it's for the benefit, because bear in mind, cryptocurrencies is still a very highly unregulated market, so there is no protection. So in case something happens with your money, it's gone. You lose it forever. If you forget the idea of your wallet, you will lose it forever. There is no recorded history, it just gone. So you have to be very careful to investing in cryptocurrencies, but of course, it is there and you can use it so banks saw this as an opportunity and especially the government's they saw this as an opportunity to come up with something of their own, which they can control, regulate, and ensure that it's used for normal purposes and not for anything else, not for any illegal activities, money laundering, terrorist activities, etc.

Rinat Malik: 00:37:20

Absolutely. I think common man does need some protection. And if it's coming from the government, then that's that that's very good. I mean, who else should you know? Should you expect to protect you? But one of the things that I think one of the main difference with CBDC or CBDC stands for central bank digital currency that many governments are looking at or exploring and regular cryptocurrency that we know of like Bitcoin and Ethereum is that these Bitcoin and Ethereum these are the main one of the main selling point that they have is that it's decentralized but CBDC is going to be centralized in the it's in the name, Central Bank, digital currency. The main difference is going to be it's going to be centralized. So government would have some sort of control and that way they can also provide the protection as well as they can also implement a few things that people might not like better tax transparency because they will be able to know who paid tax and who didn't very easy on waste transaction. So yeah, there is there's gonna be less of a grey area where, you know, regular consumer or citizen can you know, sort of avoid tax in their discretion is going to be and also, but there will be protections like you mentioned, like you know, there will be less of transactions with which includes terrorist activities or drug use and that kind of stuff. So, you know, society would be more protected, protected in in these ways. So, there are benefits and, you know, disadvantages.

Amit Sarkar: 00:39:05

I think Rinat, You mentioned about tax avoidance but even with cryptocurrency because you cannot buy many things with cryptocurrency. Today, what will happen is you will have to convert it to a local currency, say dollars, pounds, euros and once you convert that it gets added to your income, so you then have to declare it and then you have to pay tax on it.

Rinat Malik: 00:39:26

Yeah, so absolutely. That's of course there. But what I'm talking about is say for example, you have a company, business card, and you go to a business trip and you know, your company has said that you can spend money on meals and stuff like that, which is that going to be added you know, with the companies then use that as a, you know, tax write off because those were expenses, the company expenses, even if you do go over your budget a little bit it would still be you know, kind of like counted as spending company expenses, but that is a grey area if you had specified your, you know, an employee's limit on daily, you know, spending limit And then they go over it that, you know, if it's if it's CBDC government's going to know about each and every spending, including, you know, which one was B, you know.

Amit Sarkar: 00:40:27

But I think that's very you're mistaken. I mean, they will have, you will have a wallet, and they will have CBDC. But CBDC will give you the same level of anonymity that a cache does. That's…

Rinat Malik: 00:40:40

an issue. Because that's, I seriously doubt that because all of your transaction is digitally recorded.

Amit Sarkar: 00:40:47

That's why you have that's why there is a difference between, say, normal transaction and CBDC. So like you make a credit card payment, you can track all those things, but it gives you that anonymously,

Rinat Malik: 00:41:01

but if then you can question that if you get that anonymity, then what's stopping, you know, the delinquent transactions like drug use or terrorist activities? How are they gonna track? Anyone?

Amit Sarkar: 00:41:13

So with CBDC, you will need a wallet or you will need a bank account and those bank accounts will be managed mostly by the central banks, or it would be managed. I mean, there will be some agency to manage that. And those transactions Yes, but the digital currency itself, the whole point of having a digital cash, is to replicate What's there in the physical world.

Rinat Malik: 00:41:37

I seriously doubt that it would give you the same anonymity as cash. But you know, you do have some limit to well, if you even if you're doing digital transactions, in your bank, you don't have any I really don't think that you will get the same level of anonymity as using cash but you know, however it is, it's still, you know, newer technology being implemented. And I'm sure the delink friends will find newer ways to go there, of course, but

Amit Sarkar: 00:42:09

The problem is there will be a new way and that's how that's how innovation comes. So people Yeah, people strive to look at how to bypass an existing problem, and they figure out a new way. And then governments track that and they form a new regulation.

Rinat Malik: 00:42:27

Absolutely, I think I think the goal is to make the severe crimes so difficult. I mean, there's always gonna be petty crimes. And you know, a lot of the time civilians end up doing petty crimes. It's just the objective is to make like severe crimes like murder or terrorist activity so difficult that that gets significantly reduced, hopefully to zero but the rest of it will probably be part of our society, whether we like it or not, but people could have other controversial views to debate. Anyone wants to but yeah, it won't be a fun debate. I don't have any strong views or opinion on any of these. But yeah, happy to be enlightened. But yeah, going back to our topic, cryptocurrency and digital currency, all in all, is also a major part of fintech. And some of the things that are also happening is looking at all the transactions in a blockchain in any of the cryptocurrency or CBDC. You could find patterns and you know, you could implement machine learning algorithms to find patterns and find behaviors, consumer behavior on a macro level as well as on a micro level because we don't really necessarily lack computing power, we just let quality data and now with real life transaction in a whole country being added or you know, in case of Bitcoin, or Ethereum worldwide being added, you can identify various patterns and make larger economic decisions that impacts everyone, you know, do policy regulations that are going to be beneficial to the biggest number of consumers this way, which, you know, obviously, these are all powerful tools, and we hope that people who are in charge will use it efficiently and for the right reasons, and if it is used in the right reasons, it could be so much powerful and beneficial to us common people.

Amit Sarkar: 00:44:23

Yeah, absolutely. I think that's another I mean, if you just Google FinTech, cryptocurrency blockchain, they are always at the top because that's the that's the way to go forward. How do you go to a decentralized structure? And if you have a CBDC How do you manage it? What kind of ledger it would look like? etc. So I think these technologies are very crucial, even though it is still a very grey area. It's still run on speculation. If you look at the prices of Bitcoin or Ethereum, they fluctuate quite a lot. So it's still driven by a lot of speculation. So it's not that's why it's very difficult to invest in these currencies right now, because they are not very stable. If you go with a traditional currency like dollar and pound they're very stable. So it's your the value of that currency will not go up or down drastically. So like…

Rinat Malik: 00:45:16

Yeah, I think one of the funny thing a few years ago, I think Uber was looking at accepting bitcoin and then the reason they couldn't is because at the start of the journey, you might have a price of a Bitcoin which could significantly change by the time you end your journey. So yeah, but you know, we are slowly moving towards a

Amit Sarkar: 00:45:39

But Cryptocurrency it could be a CBDC, But yeah, we are moving towards that direction. Because I think digital is the future. Most of the transactions are now happening. I mean, when we talk about transactions, everyone has already started using Apple Pay, Samsung pay, Google Pay. When you have a wallet on your phone, you don't have to carry a physical wallet. And with that wallet, you have lot of credit cards, debit cards, your loyalty cards. So suppose I go to Tesco or Sainsbury, which are grocery stores here in the UK. We can just use those cards, get points on it, and we can also redeem them in the future. So it's so convenient that you don't have to carry a wallet anymore. You just need your mobile phone and actually not mobile phone you can also use a smartwatch and you can do all the transactions from your smartwatch using NFC technology. So I think making your life easy is the goal of FinTech and getting more people connected getting more people involved getting more people bank is also the getting rid of the red tape, the bureaucracy, the slow processing times, I think…

Rinat Malik: 00:46:46

while remaining compliance to regulations…

Amit Sarkar: 00:46:49

use technology to your benefit and ensure that wide range of technological sorry, financial services are available to the public. I mean, you just talked about a few there is there are financial literacy websites where you can actually get literate about how to do. how to invest money. How to save money. In the online banking world, you have now spending categories so you can actually through your bank statements you can see which areas are you spending more are you spending more on food travel, commute or leisure entertainment etc. So there are categories so you can look at a monthly trend of where you're spending more money that helps you make better financial decisions. You have digital tax returns now, so you don't have to file a paper tax returns anymore. You can file your tax returns digitally, you get refund digitally, it's no longer a check. It just comes to your bank account. You have Robo financial advisors, so earlier used to go to a financial advisor now, but most of the advice that they would give is based on certain inputs and the standard products available so there are Robo financial advisors. Then there are instant loans we talked about. And there are many other things in the financial in the financial industry that has been actually transformed. The major thing that has recently that has come up is buy now pay later. So you make a payment you buy something say an Apple Watch, or say Samsung phone and you buy that say 800 pounds, and you pay it later over a period of three months or now or four months or 12 months. So that's basically Interest Free Credit to you at the tip of your fingertips and you don't have to worry about paying now, of course it puts a lot of people in debt, but that payment option is now available. So that has also transforming the industry. And there are many other things that's happening mortgages. So, mortgage is just the home loan. So if you want to apply for a home loan or change your existing home loan to a new provider, there are a series of steps and most of the things can be done online. So you don't even have to do go to a bank, send them paperwork, everything is done online. So it just makes your life so convenient. So now where you could do maybe one or two things in a week, you're able to do 1020 things in a day.

Rinat Malik: 00:49:20

Absolutely and that that just changes the whole lifestyle before part of our monthly or weekly chores. Were a big chunk of doing just this and now we just do it, you know while leisurely lying in bed from our phone, and we have free time to innovate or to think about or consume or learn and you know, these are the things that are also help will also help us progress in our life. lead a more content life, obviously, by you know, by the way you choose how you would spend all of this free time you could also like yes, yeah, you could also mindlessly pre keeps scrolling, which I am also guilty of, but yeah, I mean it's all about control. But yeah, you have all of these free times that thanks to technology and the connection of technology between interdisciplinary, interdisciplinary collections like finance and other industries with tech. So yeah, we've talked about many aspects of financial finance and tech. We've talked about retail banking and how the business process goes on in the background and how they're being efficient, more efficient with tech and then we talked about foreign exchange. We talked about cryptocurrency, we talked about quite a few things. And we've only touched on the table.

Amit Sarkar: 00:50:51

one thing we missed is the investment. So we talked about we mentioned Trading212, and we mentioned Robinhood but these are so convenient apps that you can buy stocks from any country, literally, US, UK, Asia and you can invest money, you can invest money in cryptocurrencies you can invest money in bonds, you can invest money in stocks, many different products ETFs index funds, etc. And it makes your life easy just with the click of a button. You transfer some money and you buy some financial products. You don't have to go through a traditional bank, open a demat account, etc. It's all in one app.

Rinat Malik: 00:51:33

Absolutely an even before the advent of companies like Trading212 or Robin Hood, even retail banking was an exclusive club that not everyone was able to afford or not even just to experiment or test now. You can you know, they can also provide commission free trading of course they are making money in different ways that you know, we probably touched upon in our other source but the point is that it became so much more reachable to normal us regular people that you know is turning the investment world upside down as well because you know what happened with cane stock shares, you know, a lot of people and that wouldn't have happened if all of these things were you know, and you know, a lot of a lot of those transaction happened in Robinhood. Because, as you know, just regular people had access to be able to buy and change the outcome of you know, all of these Wall Street analysts. That was, that was quite interesting times, and hopefully there will be more and more power to regular people. Eventually, as everything becomes decentralized

Amit Sarkar: 00:52:56

I mean, we say that it everything will become decentralized, but someone still has to maintain the infrastructure

Rinat Malik: 00:53:03

It’s True. but the thing is rather than having one central body if there are 10 smaller central bodies, that still a little bit more, more power to the masses than the other and then obviously there's obviously in capitalist market, there will be competitions and out of those 10 Probably one would be a little bit bigger and one would go out of the market, but overall you know anyone who studied economics or is there is concept of monopoly and you know, various other types of markets and oligopoly is the best one for consumers because there are few big players there is no one has monopoly, but big players makes the makes it easier for consumers like what we oligopoly is an example of oligopoly is UK grocery shopping we have quite a few five six, Sainsbury's as well, not Walmart but Morrison's and they're big enough so they can they have the logistics power to bring food bring items for quite cheap to the consumers. But they're also in competition with each other. So they're also having to keep the price down low. So it's all way all the way win for the consumers. And that's probably where we want to get to with, you know, all kinds of these kinds of tech products and fintech.

Amit Sarkar: 00:54:28

Yeah, not just crosses groceries. I mean, even if you look at today's tech industry, I mean most of the technologies either with Microsoft, Amazon, Facebook, Google, Apple, Samsung, most of the technologies within these companies. So most of the online applications that we use, or mobile phones or even devices, they are or say email accounts are actually from these companies, so they are kind of a big thing, and they dictate where the market goes. So it is it is good for the people but yeah, let's see, let's see what happens and things will change. Things will keep changing and the digital world is a necessary thing. It's necessary evolution. Fintech is I mean, Rinat already mentioned Fintech is just one thing that is food tech, biotech. There is a Edu-tech. There are so many industries that are getting transformed by technology. And one of the reasons we started this podcast is because technology is so exciting. It's changing every day. It's changing very rapidly. And that's what that's our passion as well. So we keep reading about technology. We keep understanding its implications. We keep hearing. Other eminent speakers in the industry, we read blogs, we read news. So we are very passionate about technology. And that's what we are trying to do with this podcast is to bring awareness about these different things different industries, and see how technology is transforming and how technology is making a life easy. I mean, technology can be used for many evil purposes. But in the end, its main goal is to make money for the businesses, of course, but also to make life easy for you.

Rinat Malik: 00:56:13

Absolutely, yeah. What benefit does for the consumer is ultimate targets of course. So yeah, this this was actually quite a good talk. You know, hopefully the audience you guys have enjoyed and, you know, got some new information in different areas of FinTech even you knew some of it I hope, we you know, we were also able to bring you some new information in from a different perspective. And yeah, as Amit you said that it's ever changing and new technologies are coming up. And so yes, do subscribe to our channel to keep in tune with all the things that are happening and will be happening in future. Hopefully, you guys will also reach out to us the way usually do with newer topics that you'd like us to talk about. And yeah, it was it was fun talking today and hopefully we'll see you guys again

Amit Sarkar: 00:57:12

Thanks, everyone. Bye

Rinat Malik: 00:57:14

Thanks, everyone. Bye