1060. News: NatWest, HSBC & Lloyds face new rules, Adyen drops €750m and Revolut steps into the real world

24:37It's really kind of that human component that getting you over the finish line, right? Getting you the offer at the right time. But when you talk about agentic, then you suddenly have a machine making the decisions. And then where does that maybe human layer like play, right? What, how, well, the AI agent, and I never say never when it comes to AI, right? But, you know, that spur of the moment decision to actually make that purchase because of that offer, right? Can an AI agent do that? And so I think it's really, really interesting how that whole space will develop over the next few years. I love that you brought this up because I think that actually this is almost a defensive play against Argentic in some ways.

25:21Adyen is going to be all over Argentic in terms of pushing it, of course. But at the same time, merchants are really worried about Argentic to an extent, right? There's a huge loss of customer interface, the loss of human connection with your customers and the data that comes with that, right? And the ability to cross sell that Argentic brings. And one of the things that I also think is at risk because of Hergentic is all of those loyalty offers that we get today, the ones where you go on Honey and you scrape a code or the one where there's a limited time sale, Hergentic is going to be really good at finding those and optimizing for those.

25:58So that money that they're already spending on discounts is going to go higher and higher and higher because they're going to be scraped off the shelf by bots. So I think this is actually a play in many ways for Adjun to be able to bring those offers to a place that bots can't get to, which is where you've already gone through the checkout flow. You've built a basket. You're at the point of the checkout, and now you're offering someone, a human, based on their actual customer insights that they've done across the store, across history, stuff that's much harder for a bot to get to. You're offering that person the offer at that point in the flow.

26:29And that, I think, is going to be a lot more efficient for a merchant to serve than offering shelf-level discounts that all agents everywhere will have access to. I think this makes it a little bit more contained and it gives Adjian an edge against other PSPs who won't be able to protect merchants from agentic in exactly the same way.

26:50Laura Watkins:That's so interesting. Particularly as they've sort of made a point about, you know, it playing into their agentic commerce strategy, but, you know, it doesn't have to be pro, I guess. It could be a preventative move all the same. it's not clear but that's such an interesting I'm going to get a phone call now from Agents saying you guys have gone completely wrong if we're wrong we will say we're wrong that's maybe a spicy take we welcome those I do think they probably need to prepare for both worlds because I think it will coexist both worlds will coexist in some way at least for a while the Agentic which will become more for very functional repeat stuff, right, which is already happening in some very, you know, small areas.

27:35But the human thing, I mean, the human part of the purchasing process is not going to disappear in a few months. I think that's going to take quite a long time. So I think both, and for both, you need the data. So ultimately, you know, the data play still holds.

27:50Laura Watkins:Yeah, absolutely. And James, what's your take on this, particularly as it sort of shifts towards personalized pricing and promotions, as we've said? And obviously that all sounds great on paper. Will's kind of mentioned merchants' hesitancy around the sort of AI nature of it. How about the customer? Is this something they're going to reach for with both hands or is there going to be a little bit of that sort of reticence around trust and so on that we spoke about in the previous story? Yeah, for sure. And the personalized pricing point is fascinating how that interacts and what that looks like from a consumer point of view.

28:30For me as a consumer, it's great. If I think about it as a regulatory compliance consultant, there are a lot of challenges within that. And I understand it's not a regulated environment a lot of the time, but I think there are concerns around fairness and transparency for personalized pricing. and to the other side of that sort of predatory pricing where everything's£10 unless you've got an unnamed loyalty card, in which case everything's£5. So using that data to bring customers in and to reduce pricing is positive as long as pricing is fair in the first instance, I guess.

29:14Laura Watkins:Yeah, absolutely. And Michelle, maybe final word to you on this one. obviously sitting in Europe as you do, and as does Agin and both Talon One. Is there a sort of cultural take on this about, you know, kind of European merchants or customers even? You know, we talk about sort of loyalty and rewards programs typically being a US kind of focused initiative. What's the kind of European appetite for this? Oh, wow. I can answer this maybe from now, nowadays maybe from a Southern European point of view because I haven't lived in Switzerland for more than 10 years. So it's very underdeveloped, I think, in general.

29:53So I think there's a huge market for this. But I think people are getting the appetite now. You know, you actually get these programs and loyalty programs more and more from, you know, I don't know, telcos. And they're all over the place, right? Distributed, there's startups popping up, obviously trying to push in that space. And I think now, and before it was so complicated, you had your 20 cards, right? And now it actually, even with AI, I think it's going to become much easier that actually someone takes care of that and make sure you get the right offers at the right time. I think it will become more important.

30:25It will, it's something that people, especially in, I think, in the macroeconomic environment, inflation, things are getting more expensive. They are, you know, probably more hungry for it than maybe before. so that would be my kind of just opinion on the spot.

30:44Laura Watkins:No, no, that's great. Yeah, I mean very possibly given all of that sort of macroeconomic stuff that you just talked about, like this has come along at exactly the right time for exactly the right market. So we wish the partnership well and we will keep an eye on it and see how it progresses. But on that note, just going to take a very quick pause here back shortly.

31:09Laura Watkins:Before we get back to the news, we wanted to tell you about our latest Insight Show. We've teamed up with our friends at P-Pro to dive into why APAC merchants are expanding rapidly into Latin America and why payments will ultimately decide who wins. It's out now. Just head to the episode below this one. And now back to the news. Our next story is that Revolut are to open their first physical store in Barcelona. The story in Euronews and many other places. Revolut is set to open its first ever physical store in Barcelona, marking a move into brick and mortar retail for the digital first fintech.

31:44Laura Watkins:The company says the space will not be a traditional bank branch, but a high visibility, immersive environment, quote, designed to engage customers and make financial services more accessible. Revolut says a physical presence could help build trust with customers as it continues to pursue banking licenses globally and position itself as a full service financial platform. The Barcelona store is expected to be the first of several as the company explores how physical spaces can complement its digital offering. So, this is an interesting one. So, let's kind of take a step back and look at the big picture.

32:19Laura Watkins:So, Revolute, one of the biggest digital first fintechs, is opening a physical store and particularly picking Spain as its first market. Michelle, based as you are in Spain, can you tell us more about this? What's your sort of take on this? Why a physical store? Why now and why Spain? So many things to unpack here. It doesn't come as such a surprise, I think, because it's not like Revolut is new to Barcelona or new to Spain, right? They have been around for quite some time. Again, I think they're the fourth bank in Spain now by market share in terms of, you know, people actually having a bank account with them.

33:03but yeah they have in Barcelona they've built their tech hub Southern European tech hub I think they have like 700 employees there and in addition to that they also actually built and launched tested the ATM concept out of Barcelona and in Spain right so it's funny because it's not actually even the first physical testing ground for it not the first physical product It's actually the store is almost like the second one that they launch again in Spain. And I do think it makes sense from that point of view, right? They have the talent there. They already have experience there. They have huge staff.

33:45And obviously it plays also into the Spanish, I guess, cultural idiosyncrasy, if you will. because we are, I think in Spain, people are very digital, very digitally sophisticated on the one hand, but then it's still quite a cash-heavy society. So that plays into the ATM story, right? Why in Spain? And then the physical store, same thing again. In Spain, at least the Spaniards are very, I think, you know, very much married to their incumbent banks. I think I haven't met a single Spanish person that doesn't have a bank account with one of the big ones, right? be that anyone any of the cajas but then santander bbva whatever it may be right they all have kind of one solid bank because you need that in some way to deal with you know the administration bureaucracy and all of that so that i think the neon digital banks haven't been able to solve so really putting i think a a face to the bank and actually you know it actually says bank right the physical place it says okay we are serious we you should take me serious and we are not just digital.

34:55But yeah, I think Spain, from that point of view, makes a lot of sense.

35:00Laura Watkins:Fantastic. Yeah, I mean, that's just really great context for why they've done this in that particular market and in this way. Kind of building on that, well, Revolut has said that physical space helps build trust with customers. And kind of to Michelle's point, that's very illustrative in that Spanish market where everyone sort of got that primary bank account with one of the big banks. What do you think is driving that? Do people actually trust financial services more when there's like a bricks and mortar physical presence? You know, is this about trying to stand out in a crowded market or even blend in so they look like one of the established banks in this market?

35:40Laura Watkins:What do you think is the correlation between trust and physical presence? Honestly, I don't know if this is actually that much about trust. I think trust from physical stores in financial services is a strategy that players have employed, like Metro and Nationwide and the UK. But that kind of requires like ubiquity and, you know, a buck against a friend, right? So you need something where your nan can see her local branch on the high street, you know, and it's there for her and she can go and get cash and she can go have a conversation with someone about money. Like that kind of presence is valuable.

36:13It absolutely builds trust. And in the UK, I think there's been a lot of effort, right, to try and preserve that kind of touch point with customers in the physical banking world. But I don't think that that's what Revolut is really going for here. You know, this is a brand that sees themselves as like more than a bank, right? They are, they have a much broader product suite, appeal to like a different customer. It's all international travelers, mobile first, cross-border business. It's premium. It's not friendly in that way. you know when Monzo is like all about flexible payments and like visibility and customer service Reveille's metal cards and crypto and you know perplexity pro in its premium account you know it sponsors an f1 team like this for me is a glitz and glam statement it's them saying you know we're here and we're cool and we're sexy and we're building like an apple store for financial services, like a sort of an experience, as they say, right?

37:13This is not where you're going to go and have a conversation with someone about your mortgage in the same way that you would have a nationwide. And so I think trust is like a good marketing thing here, but I think really the marketing angle here is, you know, we're making a splash and we're cool and we're big. They've just got to bank the license. So they're doing a lot of that right now.

37:32Laura Watkins:Yeah, completely. You know, I really like that take. I think that, yeah, they're sort of taking a stand of like announcing themselves. This is who we are. this is what we are about. We are a bit more aloof. If Monzo is for everyone, we're for, you know, more of an elite group, potentially, like kind of just putting their markers down of who they are. But to your point around, you know, we've seen a lot of digital players taking on more physical presence, like Metro opening more branches. And also traditional banks are starting to re-back their physical presence. So Barclays, we reported on this show a couple of weeks ago, have said they're reintroducing local managers and reopening branches.

38:14Laura Watkins:Chase in the U.S. is opening 160 new branches across 30 states. James, what's your kind of take on that? Is the industry kind of moving towards a hybrid model? You know, have we kind of got past the everything should be digital kind of mindset? that? What's your take on that? I think it's serving the market, right? And I don't think that physical branches are required anymore. I don't think they need it. Yeah, we can perfectly have a digital bank and then let's prove that it works. But I think there will always be a place for that. And some of the things you can do in branch, you would really struggle to do digitally for sure yeah there's sort of really complex um cases or real specialists or power of attorney accounts or things like that you need to go into somewhere to sort that out um so i think there will always be a place for it what does a bank offer as well you know i think a bank can be a place of education of cross-selling of products of upskilling customers to use digital channels as well as banking.

39:25And I think that sort of transactional side is almost kind of ancillary to the other things that a bank can offer. If you look at what Santander have done recently with sort of the work cafe stuff, it's a cafe with a bank, you know, rather than a bank with a cafe. It's great. It's a good place to work because I still haven't been in there to actually do any work. No, it's very good. And they give you a free coffee, you know. It's actually nice. I was reminded when I saw Revolut, I was reminded of that, but I do hope Revolut does better. But yeah, I think it is a good thing. It's a good strategy that they launched with them.

40:06Sure. And just one last thing on the banking sort of physical presence. Like banks serve communities ultimately. and actually having a physical presence in a community and being a part of that, I think is a really positive thing. And I think it's just getting that balance right of what it's used for because, as you say, going in to pay a check, maybe not. But there's a lot more outside of that.

40:34Laura Watkins:Yeah, sort of that experiential kind of activity around it and sort of, as you say, like a cafe that happens to do banking is probably more enjoyable and useful to a community more broadly than just being able to do some outdated services. But yeah, it will be interesting to see how the Revolute one plays out. I mean, Michelle, do you think this scales? Do you think, you know, is this a one-stop shop like in sort of Will's sort of Apple Store example of like is this the flagship and there might be more or is this, you know, a one-off? What do you think? Not sure how to make that prediction. I think picking up on, I agree, it's not maybe about trust per se in that sense, but I do think it's about identity and loyalty, right?

41:30Again, and it connects to the bank license because you want Revolut to become your primary bank because I think especially also in other markets, it's the second bank, right? It's not your primary bank, right? So it's also kind of, and I think I agree very much with Will there, it's really making kind of that, I don't know, that mark and saying, hey, we are here, right? And we are actually to be reckoned with and we are cool. And I actually draw that comparison to the Apple Store, which is very brave, I think, because obviously Apple, when they launched the Apple Store, I mean, they made a huge splash.

42:05It was a huge thing. They had, I mean, it was such a pure representation of their identity that they previously built digitally. And I think that is now the challenge that Revolute has is actually how do they make that, how do they translate that? How do they even, you know, define their digital identity into a physical space? Because if it's just a bank that is a little bit cooler, then I think they've lost, right? Because they now put expectations out there. I mean, it really needs to be a statement. And yes, I actually do think if it works in Barcelona, because Barcelona is also, I mean, it's actually the perfect place as well, because lots of people from everywhere, digital nomads, expats, young people, design tech savvy people and so on, right?

42:53A huge tourism destination as well. I think on the one hand, they will probably attract a lot of new customers that way. but on the other hand I think if it works there they will definitely expand but I think it will be statements everywhere I don't think they're going to be in your like neighborhood like having branches all over the place I don't think that's the concept right it's going to be London New York I don't know flagship HQs kind of thing yeah there's one construct actually that comes to mind right and you think about what Reveille is as a business when it's positioned itself internationally If I were to make a prediction about where this goes, I think they're thinking about physical spaces and maybe this is a bit of a trial run.

43:39Where does banking, where do cards make sense in physical spaces? I think this might go in like a lounge territory. You look at airport lounges, you look at event spaces. If I were to put a hot take on this, I think they might think about, okay, how can we make a Revolute card member, a Revolute traveler have access to premium experiences? Where can we do stuff and collab with other brands or whatever it may be, right? How do we become the next Amex, which is, as you know, right? Oversubscribed. It kind of lost some of its value proposition at this point. Is that going to be the Barclaycard BA kind of effect going on here?

44:19That's where I think this goes, aside from just like the loss-leading marketing event space in major cities. Nice.

44:27Laura Watkins:I love that hot take. We love a hot take. And I think, yeah, I could well see that being the case. It sort of joins up all of Revolut's proposition, starting with that sort of travel money that you talked about as their sort of initial proposition and then starting to go premium and then adding premium services on. So I think that could well be the case, but I think we may have to wait and see. But on that note, we're just going to take another quick pause and we'll be back very shortly.

45:01Laura Watkins:Okay, now for a quick look at a story we don't have time to cover in full today, and this is that Burbank rolls out sign language video call feature in Azerbaijan. The story in the papers, Burbank has launched an in-app sign language video call service, becoming the first bank in Azerbaijan to introduce this capability. The feature allows customers to communicate directly with bank representatives using sign language within the app. removing the need for third-party tours or in-branch visits. The move reflects a broader shift in financial services towards embedding accessibility directly into digital products rather than treating it as an add-on.

45:38Laura Watkins:For many customers with hearing or speech impairments, real-time interaction with financial institutions remains a challenge, and this kind of functionality aims to close that gap. Burbank says accessibility is a core part of its product strategy as it continues to build out its wider ecosystem across banking, payments and e-commerce in the region. And while this is very interesting, Burbank is not alone here, but it is still a relatively early stage globally in terms of offering sign language, which is really why this one stood out to us in particular. So a few examples from around the world and a little bit closer to home.

46:15Laura Watkins:Barclays have introduced Sign Video, which allows customers to connect with British Sign Language interpreters via video banking. Lloyd's offers a British sign language video relay services across all of its brands, so Lloyd's, Halifax, and Bank of Scotland. Bank of America provides ASL, so American Sign Language, video support via appointments and some digital channels, and also integrates accessibility features across mobile banking. And some fintechs, such as M26 and Bunk, focus heavily on accessibility design, but real-time sign language support is still rare. and I think that's why this story in particular is so interesting because accessibility is often very high on kind of people's design radars but actual sign language is one of the last things to be addressed so I think this is really interesting and it's particularly interesting that it comes out of a region such as Azerbaijan and that they've put that so high on their product roadmap strategy so I think this is one we'll keep an eye on to see if this is replicated by other banks, either in the region or further afield, because it's definitely a piece of accessibility that often gets overlooked.

47:26Laura Watkins:And it'll be interesting to see how this progresses. So I'm going to take us to our and finally section. So I don't know how often your takeaway habits get analysed, but this might make you think twice before your next order. And so our and finally story today comes from news.com.au. Samir Nasri faces a$9 million tax bill over Deliveroo orders probe. Former Arsenal and Manchester City midfielder Samir Nazri has found himself at the centre of a rather unusual tax investigation in France, where authorities are reportedly using his Deliveroo history as evidence. Investigators claim that he may have been living in Paris while officially declaring himself a tax resident in Dubai.

48:08Laura Watkins:And one of the key data points, 212 Deliveroo orders sent to a Paris address in 2022. Authorities argue this points to his centre of vital interest being in France, a key legal test for tax residency alongside travel records, property ownership, and media work in the country. If this is upheld, he could face a tax bill of around 5.5 million euros. All right. What do we think of this one? I mean, the first point, 212 delivery orders in a year, more than one every two days. Feels like a lot for a professional footballer. but also at what point does your takeaway habits become legal evidence? Will, what was your take on this one?

48:54I was a bit surprised that it kind of got to that, I guess. I mean, phone records and all sorts of similar digital footprints have been used in this kind of investigation for a long time. I mean, has the unfortunate person who's had the experience of trying to file different state tax returns in the US, I mean, some of the things that they make you go through showing that you don't have connections, right? You didn't pay a water bill in whichever country, whichever state. It surprises me that it went down to the level of delivery. What I probably think is more interesting than that is to what extent this data will become commoditizable to investigations.

49:34And to what extent it probably has already been for some time. I would have thought that eating and drinking and commuting, like TFL probably has a very accurate representation of how we all move and live in London and a million other such examples. So, yeah, I think Nazari probably doesn't have much of a leg to stand on if it's got down to the delivery state.

50:00Laura Watkins:Yeah, they've absolutely gone deep on his records if they're all the way down to the delivery receipts for sure. James, what was your take on this one? Yeah, I mean, it's getting calls out for deliveries. Yeah, being out in the public seems a little bit unfair, but I'll let it go. Yeah, I think it's good that the data's there, ultimately. And if that data can be used for what is a good purpose, you know, tax evasion isn't the best thing in the world. so if that data is there then it is then you have nothing to hide then it is a positive but as Will said it's all around just from TFL to the car insurance app on my phone to anything else if you think about how data can track where you are there really isn't much room to hide yeah absolutely and there's so much data you're traveling data you're eating and drinking habits maybe your hotel bills, even it's suggested like gym check-ins, etc.

51:08Laura Watkins:Things you do by habit that indicate that you are permanently in one location or at least for a prolonged amount of time could stack up. Michelle, what was your thoughts on this one? Well, surprised and not at the same time, right? Because I know Spanish and I think French is not so much different tax authorities. I don't think they joke around a lot. and they will definitely find a way to get to the bottom of it. I think it is a very good reminder to everybody that everything you do digitally leaves a footprint, right? So if you want to hide something, you'd rather go get some cash out and do it the old-fashioned way.

51:49But yeah, I mean, generally, right, I think, you know, if the data is there, like your life lives somewhere. And then, I mean, it could go like really serious and deep on data privacy and who owns the data and who should have access to what and how can you actually make sure that, you know, the data is yours and who can get it. I mean, it's a huge minefield. But yeah, reminder, you know, don't perhaps if it turns out that it's really the case and his central vital interest is not in Dubai, you probably need to be a little bit more careful. I mean, to bring it back to sort of like a boring fintech point, right?

52:28I think that there's going to be a point where Google, Meta, these guys do get queried fairly regularly by government agencies about users' online history and what they're saying and just the telephonic footprint, right? But it's probably true that all these other apps and all these other things that have increasingly richer data on us might need some kind of protocol or some kind of interface where they can actually facilitate what is effectively a lot of subpoenas for this kind of data. Or in the other direction, maybe there's going to be some kind of consumer protection, right? Some kind of pushback where, some kind of GDPR, where you can say, actually, you know, this is not fair game in the grand fight between people trying to scrape tax and people trying not to.

53:20Actually, you know, there will be some kind of protocols that protect this kind of information. But it's going to be, I think it's going to be something that were the these like if i were building an app today or an asset today that that had that kind of information i would i would be thinking about these eventuality that i would need to build a way to respond to government requests on the data of my users nice well we will have to

53:42Laura Watkins:keep an eye on that to see whether yeah your delivery data gets protected or it is fair game for ongoing financial investigations um and yeah we're yet to see whether um this is upheld and does have to pay a massive tax bill to the French authorities. But to your point, it may not be the last of these kind of examples that we hear about. And on that note, that wraps up today's show. Thank you so much to today's guests. Where can people find out a little bit more about you and your companies, starting with you, Michelle? Sure. I mean, you can find me on LinkedIn, as everyone, right? And check out tennity.com for everything in detail about what we do.

54:20I would love to connect. Wonderful. Thank you. Will? So you can find Flagship at flagshipadvisorypartners.com or on LinkedIn. Outside of the work that we do as strategy consultants, we publish content at least weekly on topics such as these through all our channels. So if there's a mailing list, go sign up. We do over 1 ,000 executive interviews a year and sort of 20 to 50 surveys a year, depending on the type of projects that we're doing. So there's a lot of rich data that we end up putting out into the world. So go look us up and feel free to consume some of that.

54:56Laura Watkins:Brilliant. Thank you. And James? Much the same. You can find me and Fizzle on LinkedIn or fizzleinitiative.co.uk where you can see what we've been up to, relevant blog posts, interesting work that we've been involved in recently. It's all up there. Brilliant. Thank you. As for me, you can find me, Laura Watkins, on LinkedIn or otherwise 11fs.com where you can find out more about all of our content that we put out, not just this podcast, but also all of the wonderful work that my colleagues in the Eleventh-day-day consulting and Pulse teams do. Or otherwise, you can reach me and the team on podcasts at Eleventh-day-day.

55:32Laura Watkins:Thank you so much for listening to today's show. If you like what you've heard, please make sure to follow us on your favorite podcast platform of choice. And if you really like what you've heard, why not share it with a colleague or a friend? And if you want to join the conversation, find us on social media. Just search for 11FS or Finting Insider and you'll find us. Thank you so much and goodbye.