1072. News: All about partnerships: Barclays x CommonAI, Monzo x Fair4All Finance, Stripe x Lloyds

28:24Laura Watkins:Deanna, maybe we can talk about that in terms of the sort of stepping stone piece that Marisha was talking about there. Like this isn't just sort of helping people in a pinch. It's also supposed to, you know, take them on a stepping stone into getting mainstream credit. But sort of how important is that to the kind of overall objective and sort of what does that look like from your perspective? Yeah, absolutely. I think Marisha touched on it a little bit. I think what's really exciting for us about this pilot is it's that longer term impact, not just for the consumer, but also for the industry.

28:56so the way that we kind of hope this changes over time is for customers accessing this product they build that trap record with the lender and they are then able to progress to other and often cheaper products and then over time they've got this established track record and they're borrowing and exactly same products that are available to to us on the call although i'm making some assumptions about people's credit score and the way that they can access credit but you understand what i mean they're kind of a mainstream product and what was really exciting for us with with the kind of partnership and the way that it developed with Monzo was kind of a very clear pathway to their mainstream product that's available to people with or often in the industry called prime credit scores but also this notion that you actually have to save to be able to borrow and there's a really interesting behavioral link there around people kind of saving alongside borrowing there's lots of really interesting research around this including something that an organization called Nest Insights published recently around the kind of psychological impact that has on people's ability to kind of save alongside borrowing or save to borrow.

30:05There's lots of different models and we think that that element of it is really exciting because as Marisha said it's I think credit ultimately I think people that want access to credit should be able to access credit and they should be able to do it in the way that suits them but ultimately the ideal is is for people to have savings for people to be able to save and if they've got an emergency something that comes up that they've got savings that they can rely on reality is one in five people in the UK don't have a thousand pounds in savings so if something like your car breaks down or you've got another emergency boiler breakdown it's really difficult for some people to be able to find that money to be able to to make that happen so we're really excited about this piece of work and probably what I should mention as well is that it's been a really interesting example of us partnering with Monzo but also having a great level of support from the National Strategy for Financial Inclusion that was published just last year by our government and they actually named this initiative the Small Sum Lending Pilot as one of their key strategic priorities in the way that you can improve financial inclusion and so as a result of that we'd launched this fund with up to 25 million available for banks to bid for, to kind of support innovation and reaching people who were previously excluded.

31:25I suppose it's fantastic to have Monzo as the first lending partner on that pilot.

31:29Laura Watkins:Absolutely. Well, huge congratulations again. And yeah, really, really excited to see how this one rolls out and continues to positively impact people's lives. But on that note, we're just going to take a quick pause back shortly.

31:47Laura Watkins:Before we get back to the news, we wanted to tell you about an event we're hosting this month. We're teaming up with Paymentology for a special open mic night all about the next era of payments. It's happening on Wednesday the 24th of June at the Joiner on Worship Street in London from 6pm with free food, drinks and plenty of fintech folks in the room. If you fancy joining the conversation and maybe even grabbing the mic, head to the link in the show notes and save your spot. But before you do that, carry on listening to the show. Our final main story this week is that Stripe and Lloyds have debuted payment suite for UK small businesses.

32:23Laura Watkins:The story in payments, Stripe and Lloyds Bank have partnered to launch Lloyds Accept, a new payments offering that gives small businesses access to Stripe's payments infrastructure directly through their Lloyds business account. The service enables merchants to accept payments in person, online and via payment links with onboarding completed in minutes. The article highlights a growing trend in financial services where banks increasingly partner with fintech to deliver modern capabilities to customers, combining distribution and trust with technology and product innovation. Well, given that we have a partnerships expert on the show, and Marisha, I'm going to come to you first, this kind of feels like a really good example of a bank and a fintech playing to their respective strengths.

33:06Laura Watkins:Firstly, what did you think of this partnership? And is this a trend? Are we going to continue to see a lot more partnerships like this one coming through? So firstly, absolutely. So when we look at the evolution of financial services right now how banks are rethinking, creating, you know, services for whether it's consumers or SMEs, they've all understood one thing. You can't build everything yourself, right? And so what I think banks have finally realized is that they need to actually focus on the customer experience and outsource, you know, very specific tech to fintechs who do it really, really well, who can build, you know, at pace, and they can also evolve with the growing needs of customers.

33:52So I think that's the first thing that we're seeing. That trend has been ongoing, but now I think the banks are finally accepting it. When we look at this story in particular, so a couple of, you know, call outs from us. So the first one is SMEs is and has always been an underserved segment. That's the reality, especially when you look at not just SMEs, but micro SMEs, influencers, all of these make up the same space. But what is not changing is what customers expect from these SMEs, right? Customers expect the exact same level of service, the exact same level of access, while at the same time also expecting the same level of trust and security.

34:38So I think this is a perfect partnership again, because it's wrapping around all of these services into one. And when we look at Stripe, particularly, they are growing more and more into an ecosystem orchestration platform or infrastructure provider to enable all of these key features for the different customer demographics. So yeah, for us, this is a very positive move.

35:01Laura Watkins:Fantastic. And May, maybe coming to you on that sort of, you know, the point that Marisha made about institutions realizing that they can't build everything themselves. They've got a partner, they've got a share. That sort of sounds like a very similar ethos to what you were telling us about common AI. What was your take on this one? And where do you see this heading? So yes, this is about collaboration. As Marusha said, everyone needs to play to their strengths. So why not partner up with somebody who together you both can augment each other's capability. but equally I think at the heart of it you know it's around giving their customers the SMEs the ability to give their own customers the same experience that larger corporates are able to do and that way by doing so I'm able to attract and retain new customers and it's you know a way of democratizing access to services, you know, from the small independents, you know, who are increasingly getting crowded out, you know, by the big brand names.

36:14So this is really, really exciting news. And I think something that is exciting for the UK economy, you know, the UK high street and the small SMEs, they need as much help as they can to do this in a super slick way by partnering up with Stripe is very encouraging to see the UK economy do you know things like this.

36:38Laura Watkins:What's your kind of take May on the the kind of claim that through this sort of thing small businesses can access the same infrastructure as an Amazon or an open AI like what does that mean in practice is that kind of true democratization if the you know the smaller brands, the high street shops, etc. can access the same level of support and technology as these huge organizations. Yeah, I mean, the devil's in the detail. The actual, you know, payment infrastructure seems super slick, and that's the beauty of it. But actually behind it, there are lots of interconnecting pieces, which can be quite clunky, can create a lot of friction, can have actually quite a, you know, some absolute costs rather than just margin costs.

37:26And so, you know, again, the devil's in the detail as to whether when this is rolled out to the small SMEs, it remains affordable. And if there are issues, if it's clunky, whether they're able to access the same level of customer support that, you know, the larger corporates are able to access.

37:45Laura Watkins:Yeah. And that sort of customer support bit is probably going to be the most important, particularly, you know, when, as is often discussed, you know, cash flow is the lifeblood of estimators. You need answers, you need them quickly, particularly if there's, you know, any kind of holdup in the system that affects your cash flow. Exactly, exactly. Deanna, what was your take on this one? Obviously, this is a sort of example of a traditional bank sort of having to rush to modernize through partnerships. Is that a sort of customer-led driving force, do we think, in terms of customers changing their expectations in terms of, as sort of Marisha and May have alluded to, of what they actually expect from these small businesses.

38:28Yeah, I think that was a point that was really well made by both Marisha and May about expectations growing. And I think as we kind of spoken about, people often talk about small businesses being the backbone of the UK economy. I mean, if we talk about some of the figures, 99 % of all businesses are small businesses. If you drill down further, over 50 % of all businesses in the UK are actually sole traders. So kind of, you know, one person doing something, it could be a plumber, it could be somebody who is a content creator, there's lots of different ways that people can do that. And so this is why access is a really important point.

39:07I think it's both linking it back to the original point of access, people's own financial health and resilience their own credit score their access to payment systems that work well and being paid on time and being able to kind of invoice and and pay vendors and receive payments on time all these things are interlinked and how we kind of improve growth which i guess has been a bit of a buzzword

39:28Laura Watkins:for a little whiner yeah absolutely um but marie sure if we kind of take the the stripe element of it uh and we kind of look at that in isolation stripe is kind of almost looking like an essential piece of financial infrastructure at the moment and they've made some very large partnerships in recent years obviously with Lloyd's in the UK but taking it more internationally Goldman Sachs Citi fifth third in the US and also UAE neobank WIO to look at SME kind of support in the UAE so they're not you know just sticky in one industry in one geography like how impactful do you think this kind of infrastructure play could be at an international scale?

40:11I think it's extremely important, A, because Stripe has, like you said, the global scale. So they're able to take this infrastructure and create kind of access for SMEs globally, right? And if you look at, you know, the list of banks that you've just mentioned, they're already doing that for some of the largest, you know, fastest growing banks globally. And let's look at WIO as an example. So we also power WIO in the Middle East. And WIO was the fastest growing digital banks for SMEs across the Samir region. Now, partners like Stripe really helped to enable that infrastructure. because some of the most influential companies and financial services, they don't have the capability to rebuild every time they want to add on new functionality.

41:01And so using an amazing platform like Stripe, they're able to very easily tap into the technology that they need without having to rebuild everything themselves. So when you look at the type of infrastructure that Stripe has created, it's really infrastructure at scale and it's basically enabling entire ecosystems across the board, whether it's a bank, whether it's a fintech, whether it's, you know, other SME segments, they really are, you know, enabling. And if interesting connect, if we look at, you know, the Stripe use case and what they are building and what May and the team have done with Common AI, it's very similar.

41:42It's creating an orchestration layer to create access for multiple SMEs. It's just a different segment. So increasingly, you're seeing the industry shift towards creating these different types of infrastructure to unlock services across the board. And that's what we love to see because inclusion and I think all three of these stories really talk about inclusion, but with a different lens. And that trend is probably one of the most exciting we're seeing in financial services.

42:12Laura Watkins:That's such a good point. The connection between all of our stories, but also that kind of investment in inclusion and often inclusion is enabled by easy onboarding, easy access, sort of frictionless access to these services. May, what was your take on that? Like kind of the sort of emphasis on speed and simplicity being such a game changer to open up access? I mean, this is really important for, you know, the business banking community, which is, you know, as everyone said, has been, you know, oft overlooked. And, you know, it's really important that we continue to support the SMEs because, as Diana said, 99 % of these SMEs are the lifeblood of the economy.

43:02and I think this is really important for the UK economy. We need every help that we can get and so coming back to I think some of the key threads here, we're seeing the government through Diana's piece supporting these kinds of initiatives like cross-subsidising and encouraging the Monzos of the world to enter this. We're seeing Lloyds offer this kind of service behind the scenes, the UK government is, I'm sure, encouraging large institutions like this to be inclusive to the SMEs and even coming back to Common AI. This week is London Tech Week, and you'll have seen the UK's 1.1 billion budget allocated towards AI hardware, which is the physical and digital infrastructure that's really important for the UK economy.

43:59Laura Watkins:What we're saying is basically all of our stories today are talking to each other around inclusion and access and the vast impact that can make on the UK economy and economies around the world when these things all come together. So on that note, we're going to take a quick pause back shortly.

44:21Laura Watkins:Okay, now for a quick look at a story we don't have time to cover in full today, and that is that Aviva detects record 230 million pounds in bogus insurance claims as use of AI rises. The story in The Guardian, Aviva says it detected more than 230 million pounds worth of fraudulent insurance claims last year, identifying over 18 ,000 suspicious claims across its brands. The insurer says fraudsters are becoming increasingly sophisticated using AI-generated images, manipulated documents, and fabricated accident scenes to support false claims. Motor insurance accounted for the majority of the cases, with Aviva reporting a shift away from staged collisions and towards exaggerated claims for vehicle damage, repairs, higher cars, and personal injury.

45:09Laura Watkins:At the same time, the insurer says it's using AI and advanced analytics of its own to detect suspicious activity more quickly, highlighting an increasingly familiar trend across financial services. So yes, I don't think this one comes as an enormous surprise that claimers are using AI to kind of augment their claims. This is sort of the bad side of AI in terms of how you know it can be used to manipulate images in particular to show bigger dents or scratches whatever you're trying to prove but at the same time we also have AI fighting AI in terms of how Aviva is using the AI to detect sort of fraudulent claims and so these also serves as a reminder that fraud isn't a victimless crime insurers argue that fraudulent claims ultimately increase costs across the system contributing to higher premiums for legitimate customers.

46:04Laura Watkins:So yeah, please don't do that, guys. You're making it worse for everyone. But yeah, this is just another example of how AI is rapidly changing the nature of financial crime and the tools that firms need to respond to it. So that was sort of last year's amount of bogus claims. We'll see what the 2026 numbers look like, but I imagine they're going to go up before they go down, unfortunately. But now I'm going to take us into our and finally section where we have an accidental billionaire story. A man in Turkey became one of the richest people in the world without realizing it. This story from Euronews, a man in Turkey briefly found himself among the richest people on the planet, at least according to his bank balance.

46:46Laura Watkins:Ahmed Yangharad Tekalo, a 32-year-old living in the eastern Turkish city of Van, discovered something was wrong when his bank card stopped working during a trip to the supermarket. After contacting his bank, he discovered his account appeared to contain almost 1 trillion Turkish lira, equivalent to roughly$21.8 billion. That would have made him richer than many of the world's most famous billionaires. However, he has absolutely no idea where this money has come from. The bank quickly froze his accounts and launched an investigation, leaving him unable to access any of his money while the review continues.

47:21Laura Watkins:According to local reports, Takalo even asked AI what someone could do with that much money, with suggestions ranging from major infrastructure projects to buying vast quantities of gold. So, panel, if you wake up one morning and discovered$21 billion sitting in your bank account, what would be the first thing you'd do, Marusha? I must say, when I read the story, I just thought to myself, I am clearly a very risk-averse person, because the first thing I would do would be to contact my bank. I think, you know, being in the financial services space, we are trained to, you know, question the data and, you know, dot all the I's and cross the T's.

48:01So I think from my lens, the first thing I would do is really just check if it's accurate. And I think we've seen a couple of stories where this has happened in other areas. I think the one lady was a student actually used the funds. And then I think I can't remember, but I think she either was arrested or went to prison or something like that. So for me, it would always be call the bank, check if it's real, that kind of thing.

48:23Laura Watkins:Maybe don't buy a private island just yet. Don't buy a private island. I must say, I might invest in the gold piece. That would probably be my first stable coin. I mean, I'm sure I could think of things to spend$21 billion on without having to ask AI. We wouldn't need AI at all. Deanna, what was your take on this one? And, you know, obviously there is an issue that kind of connects all of our stories around, you know, what happens when your bank balance isn't correct and you don't know why. And, you know, you actually don't know how this happened in the first place. Well, first of all, I think it's a great dinner party question.

48:58I might save that for the next time I'm hosting and one that's hard to answer. I think the thing that really resonated with me when I was thinking about this was the fact that the man to whom this happened, you know, one of the first things he did was to go to AI to discuss that. And in lots of ways, it doesn't really surprise me. I think lots of us have seen the data around lots of people are using it as a kind of a way to confide in. Lots of people are using it as kind of like informal therapy sessions. I mean, even the Mental Health UK have said that one in three are using it as mental health support.

49:37And there's that link between mental health and finances and being something that is quite private, that it can be awkward to talk about money. And it might be awkward to talk about money because you're in problem debt. Or it's awkward to talk about money because actually you've just had a great promotion. You're earning a lot more than your peers and it's a bit uncomfortable to kind of be open about that. So there's lots of different ways that that can happen. And it's interesting, actually, OpenAI have just launched their financial support function in the US where you can actually connect all your accounts and get financial advice of sorts.

50:09So there's lots of like really interesting things that are happening out there. But really what this reminds me of is that talking about money can be uncomfortable, which is why often when people are in problem debt, they don't turn to debt advice until it's about 18 months too late from the time that they've started experiencing issues. so I guess part of this is also a bit of a plug to say if someone's who listening to this you know somebody who's got issues with money or struggling encourage them to talk to a person and maybe in the future to AI too but for now to a debt advice organization or to somebody else because it it can be awkward talking about money so I can see why why the man in Turkey decided to choose to do that

50:48Laura Watkins:and also like to be fair to him he literally while they were figuring out how this went wrong he couldn't access any of his money which also puts him in a in a very difficult position. Yes I did think that I thought that's quite unhelpful for somebody who's trying to do the right thing. While also publicizing what's in his bank account which equally leaves him vulnerable to robbery I should imagine as well but May what was your take on this one? Yeah I mean it just kind of comes back to you know what we were talking about at the top at the start which is about banks need technologies like high assurance programs to make sure that these sorts of things don't happen, whether that's AI or that's, you know, bog standard controls, you know, something somewhere in the system went wrong and controls failed at some point in the cycle.

51:40The appropriate flags weren't raised and this thing obviously happened. So I'm sure, you know within the bank there's going to well I hope within the bank there's going to be a post-mortem of how it happened but also how you correct it and ensure that it doesn't happen and and the worst is you know if it was 21 billion obviously you know someone you know this poor guy Takalo noticed it but what happens if it was you know 10 pounds out or a thousand pounds out or£10 ,000 out. You know, those sorts of things can go easily undetected and the worst is if it was on the wrong side of the consumer. So those sorts of things, you know, consumers do need to be protected at scale and that's why, you know, high assurance type solutions are super important for a financial institution.

52:31Laura Watkins:Yeah, absolutely. Because, I mean, you know, it is kind of hilarious that he ended up richer than, you know, Bill Gates because of a clerical error. But he equally meant that he couldn't access any of his own money, which is, you know, it doesn't help him pay his bills day to day. And obviously an error like that is so obvious to spot, but obviously slow to fix if he was sort of blocked from everything for a little while. So, yeah, you're totally right. Everything needs the right checks and balances, but the customer shouldn't necessarily pay the price for an admin error within the institution.

53:03Laura Watkins:It's got to be about balance, right? You've got to be able to protect your customer while still fix your own technical error. And I think that's where when you have these, you know, these errors which are of this massive size, that's where banks kind of, you know, all of the customer experience tools go out the window. So we have to get better at that. Absolutely. But I'm going to end the show there. But I think, yeah, we've kind of we've talked about this at length, but it all resonates that, you know, sort of access, inclusion and sort of fair checks and balances, you know, kind of what makes the whole system so much better.

53:41Laura Watkins:But thank you so much to today's guest. Thank you so much for joining me today. Where can people find out a little bit more about you and your companies, starting with you, May? Yep. So I'm on LinkedIn. I can also be found on our Anthemist page, as well as the Common AI website. And a little bit more about Common AI. We've had a number of really great press releases that have come out. So feel free to read about it. Google AI, I guess, find out a little bit more about it through AI. Fantastic. Thank you. Deanna? Thanks, Laura. Lovely to be on. Listeners can find out more about Fairful Finance by either Googling Fairful Finance or going into our website, which is justendswith.org.uk.

54:29We're also on LinkedIn and other channels. Particularly interested to talk to banks and digital banks who want to try something different, who want to serve customers and not been able to. Likewise, insurance providers. It's not something that we spoke about a lot today, but over 26 % of people in the UK don't have any insurance at all. So another really important tool to have financial resilience. So also launching some interesting pilots and work around that. So kind of anyone who's interested in this space, please do reach out to us and we'd be happy to connect.

55:01Laura Watkins:Fantastic. Thank you. Marisha? So as usual, people can go to paymentology.com or access the Issuer Academy on LinkedIn, Spotify or Apple Music. and please also you know listen to our podcast on the issue academy always trying to demystify payments and make it nice and easy for everyone to understand and then for myself you can find me on linkedin wonderful and say for me you can find me laura watkins on linkedin or check out 11fs.com or hopefully you already subscribe but please do keep listening to this podcast and that wraps up today's episode thank you so much for listening if you've liked 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 please feel free to share the podcast with a colleague or friend and as always if you want to join the conversation find us on social media search for 11fs or fintechinsigner and we're on basically all platforms or email me and the team podcasts at 11fs.com thanks again and goodbye