Joining me is Ronit Ghosh, industry chair of the Future of Finance and AI Group at the MINA FinTech Association.
First of all, Ronit, welcome to Austria to Mina.
Welcome again, actually.
Thank you for having me.
Of course.
Now let's start with, um, a question you asked actually yourself, which is, uh, who controls the future of money?
And let me get an answer on that.
What do you think now?
Is it big AI giants?
Is it banks at the moment?
What is it exactly?
Sure, so money gets split out.
So there's money for savings that you keep at your bank or your investment fund.
Then there's money in motion that's payment companies usually do that, that could be your bank, um, and then there's more speculative money.
You know you invest in real estate or in stocks and shares, so it all depends how you define money so money gets handled by in a society like ours here in the UAE or in the US by regulated companies and that's what makes money different as soon as a technology company starts doing money.
They'll get regulated.
Uh, definitely now big tech platforms are building AI agents, um, uh, as well that could sit between a customer and the bank, their bank entirely.
Our bank actually losing their relationship with their clients here?
In some ways, absolutely.
So if you look at retail banking, so our bank account before we used to have a direct relationship with the bank, we would go to the branch.
Now we log on through an app.
And it all depends on who controls the app.
It could be a bank app.
It could be a fintech, and there are lots of new banks, digital banks that are growing very fast, including here in the UAE.
There are a lot of people who are embracing in the retail sector, in the consumer sector, digital banks.
We have to differentiate.
Wholesale and retail.
So in the capital market space, in the wholesale space, big transactions, banks are still very strong.
Um, in the US institutional investors work with banks.
Um, in consumer it's everything is changing because of technology and consumer is changing much faster than institutional.
Mhm.
Now um when it comes to regulations as well, regulations move slowly or slower than how tech is moving, moving fast, uh, of course.
Now who ends up writing the actual rules when it comes to AI and finance regulators or the tech in general?
Yeah, so often what happens is that we start doing things and then the regulators start trying to catch up.
A good example is.
Uber when Uber started in San Francisco, uh, they just started doing things and then the regulators caught up.
Now in markets like here in the UAE, it tends to be regulatory permission because the regulators and the policy makers often move really fast because it's a smaller country than say in the US or the UK.
So in the US, in India, the UK, the regulators move a bit slower, but the country is very big.
Here the regulators tend to move a little bit more.
At an entrepreneurial spirit, it's a smaller market and they're a bit more agile I'd say.
OK, so they adjust quicker they adjust quicker so let's go back to the AI agents between the customer and the bank itself now if they start choosing which bank you go to choosing your loan for example, or the loan rate, um, who's really competing for that customer anymore?
Yeah, so I think we're all.
We have agents working for us and that'll be great because in the past only very rich people had bankers working for them.
So if you're very rich you have a private banker and the private banker is or even if you're super rich you have your own family office and then the people in the family office are trying to work out what's the best deal for you, the best investment, the best this, this, that, that.
Most people don't have that.
98, 99% of the population doesn't have a private banker or a family office.
You're now with agents and software giving everybody their own like little mini family office.
OK, so it is similar to that like you have your own advisor.
You have your own advisors.
It's not about the bank or the technology company.
It's actually cheaper than, yeah, it's actually by you.
So hopefully the winner is gonna be you, us.
We will have agents working on our behalf who'll be trying to get us the best mortgage rate, get us the best investment account, you know, constantly checking prices.
No one has time or if they have time, they'd rather not spend their weekend.
Do you wanna wake up on a Sunday morning and spend your whole morning checking credit card rates and mortgage rates?
No.
But if your agent is up all night on Saturday night and you wake up and it gives you, here's the list.
It's like having a mini private bank working for you.
It's pretty good, right?
I mean it sounds like it now, like the, the robot, uh, agent, uh, probably in that robot agent, yeah, exactly.
So, um, you've written also about the history of uh money going back, uh, centuries as well.
Has power over money ever shifted this fast before?
Ah, everything is shifting really fast.
So until about 200 years ago, things went in cycles, but they didn't change so much.
So for a couple of 100,000 years, there was not that much change.
We lived in an agricultural world, then we went into an industrial.
Era and now we're in a technology era and just like the industrial era sped up change like when the railways arrived, suddenly people could move it was much faster electricity, railways that sped everything up in the late 1800s late 19 um.
You know, 1800s, early 1900s, now we're having the same but much faster.
It's like another speeding up and so the world of money is changing just like the world of technology and software.
It's moving really fast and the challenge for banks and for customers is that we move at a slower biological rate, not at a technological rate.
So it's biology versus technology.
OK, if you can name this era that we're in, yes.
Would you call it when it comes to money and and power?
It's the AI age, right?
It's AI everything.
I don't know how people will look back on it in 1015 years, but right now I'd say we're part of a broader internet we gonna stay in in this era, the AI era for like 5 years from now, I think you could zoom out and say that for the last 20 years you've been in the internet age, and this is like the latest chapter of the internet age.
It's such a powerful chapter that maybe it's getting its own name like the AI age, but more broadly without the Internet we wouldn't have AI so it's, it's the Internet age.
It's the completion of the series let's say so if a handful of AI lab end up controlling the infrastructure every bank relies on um at the moment, is that a bigger risk than any single bank failing?
It's definitely a bigger risk because when you have infrastructure, whether it's AI or the cloud controlled by 3, say big hyper scales or AI labs, say 3 or 4 or 3.5, then one of them.
Having a problem disrupts the whole world.
And don't forget that these 3 or 4 companies typically are American and they're coming from the West Coast of the US.
Now we are happy here doing lots of business with the US, but it does create concentration risk.
Um one bank is a problem if it runs into a problem, but it's just one bank.
So one bank is much smaller than these AI companies.
Become or the cloud companies have become the bank is disruptive because of the connections with other banks, which is why regulators focus in on systemic banks.
So the way regulators will treat a small bank in the US it's very different to one of the big 4 or 5 banks in Wall Street.
They get much closer scrutiny.
The problem happens at a Bank of America or an HSBC.
It has a much bigger knock-on effects.
Than a small bank here running into trouble.
It's like a power concentration problem problem here, OK, so 10 years from now who do you think holds the power when it comes to finance, a bank, a tech company, or something maybe that doesn't exist at the moment in consumer banking, it's already become that these new digital platforms have become very powerful, but the bank is.
Still really important, uh, most of us still keep um our money, most of our money in the bank.
They look different.
It might be a digital bank it might be a bank where we're interfacing through the app, but it's, it's a bank and as soon as you start doing financial activities, even if you're not a bank originally like you're a technology company, you will get regulated so everyone becomes a bank you might be.
A crypto company, but then you start doing regulated activities you become a bank so you might start off as a challenger, a neobank, a crypto company, but then you grow up and remember many of the banks we consider to be old established companies once we were very young, new companies, um, the banks in this region are typically 50, 60 years old.
The traditional banks, even like a very the biggest bank in this region is probably.
Biggest international bank is probably HSBC.
It was set up in the 1860s, so if you were there in the 1860s in Hong Kong or India, you'd have thought of it as a startup.
So at some stage, everything is a startup.
So you're going to see lots of new companies come as well and enter into financial services and how our children deal with finance.
Finance or how we deal with finance even in 5, 10 years could be completely different.
Maybe one anecdote to, uh, for your audience, I have lots of colleagues who have now retired from finance who are very senior bankers.
10 years ago they used to tell me, oh, these startups like Revolut, Monzo, they're like a toy.
My children use them.
Now my friends who've now who, you know, much older than me, retired, they tell me, I use them all the time.
They used to tell me 10 years ago this is a toy.
So whatever starts as a toy or an experiment.
It's getting bigger.
Yeah, focus on that because in 5 or 10 years that might become a big, big thing.
Yeah, uh, of course, for sure it's very insightful to know that and, and we're looking forward to see what the future holds actually now it's moving very fast.
Thank you so much for being with us today.
Thank you for having me.
Thank you.
