hands so can you put your hand up if you
know your bank managers name that’s very
easy then so I’m pretty sure you can’t
explain standard variable rate mortgages
any 101 you’re very brave you’re a
unicorn in fact my point is that
financial services are confusing
inaccessible and cumbersome but we all
rely on them every single day now I’m
pretty sure given a choice like this you
could probably come up with a sensible
decision but how about now not so easy
is it so Who am I and why am i comparing
wheelbarrows and credit cards well this
is me from a young age I’ve loved making
things now at first this meant sticking
everything together with cellotape but I
quickly discovered computers and built
my first website when I was 11
shortly after graduating I moved to San
Francisco to work for an early-stage
tech startup I loved making software and
software’s everywhere
be it your phone your washing machine
and your bank and if banks had your
software then I realized that’s
something I can make – last year I moved
back to London and applied for a credit
card to fund my entrepreneurship or
I was rejected
it turns out after living outside of the
country for two years I had a terrible
credit score and I’m not the only one
thousands of people get rejected for
credit every single day for a whole raft
of reasons they’re outside of their
control so I founded a fin tech company
now fin tech is short for financial
technology and is an area that’s grabbed
us ways of investment and many headlines
of pink broadsheets in the past couple
of years and now I spend my time hanging
out with these guys but so much of the
attention in fin tech has focused on
building complicated wealth management
products designed to answer questions
like how could i optimize my investment
portfolio or how can I consolidate
insurance to save money
in fact our industry has even come up
with an acronym to describe our most
lucrative target market
we call them Henry’s and Henry stands
for high earning but not rich yet but
there are 13 million people in the UK
that don’t have enough savings to
survive losing even a quarter of their
income and we’re still we’re busy
closing the services these people rely
on the most
just this year we’ve seen thousands of
bank branches close their doors and can
expect more of the same cost-cutting in
the coming years there’s a huge
opportunity to use technology to help
these people so back to credit scoring
this is Leon Leon’s applying for a loan
this application gets passed to a credit
bureau to answer a very simple question
is he going to repay or not the problem
is the information that’s used to answer
that question is incomplete at best but
grossly irrelevant for a huge number of
us and the reason is the bureau’s
themselves refuse to involve the end
user in the process I mean after all if
you want to know about me then why don’t
you just ask it’s a bit like me writing
your CV for you even though we’ve only
just met and the way the thing is the
credit industry themselves actually sees
this as a good thing I remember being in
a meeting once sort of early on when we
started the company and someone said to
us well if our customers understand
their credit scores then they’ll game
the system and I didn’t say anything at
the time but I wanted to say you know
well if your credit score’s really good
then gaming the system would mean your
customers become financially healthy so
great game on
and what’s even where there is the
lending companies in the absence of good
data from the credit bureaus they’ve
started coming up with their own methods
of evaluation each more weird and
wonderful than us I remember another
meeting someone talked about a street
check process which I assumed was some
kind of sort of way of verifying address
or where someone lived and and we turned
out later what they were actually doing
was getting in their cars driving past
people’s houses and checking if they’ve
mowed the lawn or taking the bins out
that week and I’m sure you’ve all used
websites like this or at least seen them
you know pick how much you want to
borrow and for how long but did you know
as you move those sliders along these
companies are actually measuring how you
behave and using that to decide if your
creditworthy and did you also know that
they’ll change the initial positions
when you load up the site based on where
you live to try and convince you to
borrow more it’s pretty obvious that
technology can be a force for evil in
financials tech in financial services at
this point the idea of turning your bank
into a robot it’s probably conjuring up
some pretty scary images so let me use
the rest of my time to try and convince
you that technology can be the key to
building a fair and inclusive financial
system and one that works for everyone
a recent study found that over 50% of US
still want a face-to-face relationship
with our bank and what’s more a third of
us
actively distrust banks that don’t have
a high street presence even if mainly
banking online so the question is how
can we have a face-to-face relationship
with our banks if they’re robots
well NLP stands for natural language
processing and is the field of computer
science artificial intelligence and
computational linguistics concerned with
building interfaces between computers
and natural language or put more simply
converting written and spoken words into
concepts a computer can understand and
manipulate now I’m sure you’ve all used
tools like Apple Siri or maybe like
Google now set a time check the weather
well later this year
RBS are going to launch their Laveau
chat bot which is powered by IBM Watson
now at first this is just going to help
direct customers to the right
departments but over time as the
algorithms learn it will be capable of
much more complicated tasks imagine for
example calling up your bank instead of
hearing the usual your callers
important to us please hold hearing hey
Freddy how you doing if you remember the
rents due this week or perhaps more
likely hey Freddy looks like your
overindulge that the weekend I’ve set
aside the rent before you blow the lot
there’s been a huge huge buzz around
what’s called Robo advice which you’d
assume was trying to build products like
the ones I’ve just described and sadly
what it actually means is providing
advice to people with too much money
that don’t our to invest it properly but
those same conversational interfaces
could help the people with most
financial needs a recent report by
Lloyd’s contrasted the digital access
with financial capability and it found a
surprisingly high nineteen point six
percent of us or over 12 million have
high digital access but low financial
capability and could therefore really
benefit from technology an eighty-seven
percent of us are now online and the
fast majority of us use a smartphone and
perhaps what’s more surprising even
those in the sort of 65 to 75 age group
and now twice as likely to use a
smartphone as they were in 2012 but even
if we could talk to our bank how does my
bank know what’s best for me banking
needs to be relevant and we need to make
decisions based on concepts that we
understand
I always remember hearing the story of a
lady not far from office in London she’d
been working with the debt charity and
struggling with debt for a long time and
finally overcome her troubles and she
actually wanted to start saving so she
walked into local branch of her bank and
sort of declared to the guy at the desk
cake I want to open a savings account
and the chap said you know usual options
you can get a nicer it’s fifteen
thousand pounds tax-free maybe you want
to get a savings bond two thousand
pounds and if they didn’t do either of
those things instead she left the bank
and she was so embarrassed and ashamed
because she only wanted to save a pound
per week and what uses the fifteen
thousand pounds I say to someone wants
to save a pound a week banking needs to
be relevant but how can we get relevance
without reciting our life story or every
time we pick up the phone or go online
well prompted by a piece of EU
legislation known as the payment
services directive earlier this year the
open banking working group was formed
between the
and the Oprah net open data Institute
with the goal of building an open
standard for access for financial data
our financial data or put more simply it
means that the click of a button I could
go to any authorized company and say
this is me here’s my financial story
what’s the best deal you can give me
better still it means that the products
and services we use can be tailored to
our exact requirements I’m thinking a
credit card that detects missed payments
before they happen or how about a
current account that recognizes when
I’ve got money money left over and
invest it for me our banks make a huge
amount of money by locking us in they
hook us with free current accounts but
then build walls around our data making
it harder at first shop around for
subsequent products open banking will be
the key to knocking down those walls and
creating competition and building
products and services that meet our
actual requirements rather than the
one-size-fits-all approach we’re
lumbered with today so do you remember
Leon Leon’s a mechanic
he works hard during the week it’s
Keffer to pay his bills on time and even
save a little he doesn’t have a credit
score because he’s never borrowed money
but he’s facing a shortfall in the
run-up to Christmas and needs some extra
cash to pay for presents now imagine if
Leon could just explain all of this to
his bank and get the answers he needs
perhaps something like this
[Music]
so if I banks become robots then maybe
it’s not such a bad thing as almost look
after the Leon’s as well as the Henry’s thank you