Fintech is giving traditional banks a run for their money. Citigroup, Goldman Sachs, TransferWise, Robinhood, and more weigh in.

Insights: Challenger Banks

 ANDREI CHERNY: Fundamentally, I think that our opening comes from the single great challenge that we, as a financial industry, are facing. And it's not around costs, it's not fundamentally around innovation or distribution, it's around trust. The brutal fact is that 11% of Americans say they trust their financial institution. And if you're a financial industry executive, company-- large or small, incumbent, upstart-- and you are not solving first and foremost for trust, then you're whistling past the graveyard. Somebody said to me fairly recently that all these challenger banks came up because of 2008 and the aftermath of the financial crisis. And certainly, there's truth to that. But in my opinion, the bigger driver is not 2008, it's 2007 and the launch of the iPhone. The nature of competition has changed. It used to be people chose their bank basically based on what branch was closest to them. Today, they choose based on what brand is closest to them, which institution speaks most directly to them, to who they are, to their concerns, to how they see the world, whether they are living paycheck to paycheck or whether they're a college student or whether, as in the case of aspiration, they're a conscience-driven consumer. And ultimately, what all of these challenger banks are doing is reinventing the nature of what it means to be a community bank for a digital age. Not around community in a geographic sense about the neighborhood or town that you live in, but the community of the people who share your values and share your world view wherever they may be. And so that's our opening, that's what's driving this trend. I think, ultimately, what we're going to see is that the challenge presented by challenger banks is not a challenge to incumbents, but more broadly, it's a challenge to this industry and the way the financial industry does business. 

Insights: What's Driving the Growth of Challenger Banks?

Uncategorized

The ongoing transformation of the banking and finance world.

What's Driving the Growth of Challenger Banks?

Aspiration CEO Andrei Cherny discusses the ongoing transformation of the banking and finance world. (June 2019)

Fundamentally, I think that our opening comes from the single great challenge that we as a financial industry, are facing. And it's not around costs, uh, not fundamentally around innovation or distribution. It's around front. The brutal fact is that 11% of Americans, they, they trust their financial institution. And if you're a financial industry executive company, larger small incumbent upstart and you are not solving first and foremost for trust, then you're whistling past the graveyard. Somebody said to me fairly recently that all these Challenger banks came up because of 2008 on the aftermath of the financial crisis. And certainly there's truth that. But in my opinion, the bigger drivers, not 8 4007 In the launch of the iPhone, the nature of competition has changed. It used to be people chose their bank, basically based on what branch was closest to them. Today, they choose based on what brand is closest to them, which institution speaks most directly to them, to who they are to their concerns, how they see the world, whether they're living paycheck to paycheck or whether they're a college student, or whether, as in the case of aspiration there, a conscience driven consumer and ultimately, what all these challenger banks are doing is reinventing the nature of what it means to be a community bank for a digital age. Not around community in the geographic sense about the neighborhood or town that you live in but community of the people who share your values and share your worldview wherever they may be. And so that's our opening. That's what's driving this trend. I think ultimately what we're gonna see is that the challenge presented by Challenger banks is not a challenge. Two incumbent, but more broadly, it's a challenge to this industry and the way the financial industry does business.

 SPEAKER 1: What segment are you going after in terms of bank mobile? LUVIEEN SIDHU: Yeah, for us, it's low and middle income Americans that covers a large proportion. But you asked about why now. And it's very obvious that consumer needs and behaviors are rapidly changing and banks are really slow to adapt to that change. We're seeing Americans living paycheck to paycheck. A third of Americans doing it, so 50% of Americans don't have enough to pay for a $400 emergency. And these same Americans are being charged $34 billion a year in just overdraft fees. That's more than what they're paying for vegetables. And so we're not only improving the consumer experience from affordability from technology innovation, more consumer-friendly products, trust, but we're also shifting the business model where acquisition is branch based historically and banks are opening one net new checking account per branch per week. That's it. And today, we're opening 10,000 accounts per week using technology and really creating consumer-centric product that they're looking for that really addresses their pain points. SPEAKER 1: One product I think, the one I talk to both you and Chris that people really like is debit cards, which surprised me a little because in order to build credit, in order to increase your credit score, debit card isn't really serving you. How do you think about that? I mean, how are people who, if they like using debit cards so much, how are they going to increase their credit? LUVIEEN SIDHU: Well, I think it's important to help them with debit and offer them an opportunity to help them grow their money, save their money. But we're not ignoring credit. I think that's one huge pain point. Our customer base is thin credit file and also lower near prime. And so we're focusing a lot on helping them build credit through products that we're offering and also from an education front to make them understand. Now, there's a lot of really savvy people they don't even understand the components of what makes up a good credit score. And so there's a strong educational and coaching experience that we involve as well to make sure people are ready to take on credit and build that credit. SPEAKER 1: One thing that I know is very important to both of your businesses is you don't charge fees, no overdraft fees, no monthly account fees, no credit card fees. If you're going to do that, I mean, how committed can you be to that business, what bank-- this has been the bread and butter of banks for so long-- how can you go up against the big banks without charging these fees and doesn't that just make you much, much less profitable than traditional banks have been? SPEAKER 2: I think we have a very strong competitive position relative to traditional big bank competitors. Do you know much the cost of a savings account at Bank of America if you have less than $500? SPEAKER 1: How much? SPEAKER 2: $8 a month. That's the current price. And it costs $12 a month for a checking account if you don't have a large direct deposit or a big balance. So that's the segment we're going after. And by the way, that's a huge portion of America. I mean, you're citing the stats of something like 40% of Americans on a $500 in a savings account. So it's a huge portion of America and there's an opportunity to service these people far more efficiently by not having a big branch infrastructure and having modern technology that isn't mainframe batch-based. Everything's real time and easy. And so we think there's a great opportunity for delivering, in a very sort of Amazonian way, figure out ways to delight the consumer and wake up every morning and try to figure out how to reduce fees. That is not the way big banks-- that's not what they think about when they come to the office each day because if you look at a Bank of America or Wells Fargo earnings call, every analyst on the call is asking about how to fee income do last quarter. And I'll tell you how it did last quarter. In Q1 of 2019, the top three banks earned between $1.2 and $1.6 billion of service fees on deposit accounts. That's our opportunity. SPEAKER 1: Can you be profitable doing that? SPEAKER 2: By not charging fees? Well, our model today is primarily-- it's almost entirely interchange. So we make money when the card gets used at the point of sale, whether that's a swipe or an Apple Pay transaction. And what's great about it is there's complete alignment with the consumer. We only make money if the consumers engage with our product and using it as an every day transaction mechanism. So we are very motivated to get them excited to use it and use it for a cup of coffee or a big purchase at Walmart or Amazon. So we're excited about being able to monetize in a way that is very much aligned with the consumer's interest. SPEAKER 1: But yes or no, do you expect to be profitable long term? SPEAKER 2: Of course. SPEAKER 1: OK. SPEAKER 2: Yeah. I mean, we could be profitable today if we weren't investing-- I mean, literally, we could be profitable this month if we weren't investing so much in brand building and customer acquisition efforts on television and a lot of the marketing channels, as well as the investments we're making into getting our consumers to refer their friends and so forth. SPEAKER 1: Good, yeah. LUVIEEN SIDHU: So we're really focused on profitability. We're actually right now part of a public company. And so banks, we're FDIC-insured, we have a charter. Banks are valued on profitability. So we have no choice but to create a model that's going to lead us to either equal to or greater than profitability of a traditional bank. And how are we doing it? We're really focused on high volume acquisition and at very low cost. And so today, we're acquiring our customers at essentially close to $0, and we're doing it at very high volumes. And the way that we're doing it at high volumes is that we've gotten into a B2B2C model or banking as a service. So historically, B2B2C could have been bank to branch to consumer. Today, we're doing it bank to through business partner to consumer. And so today, in the higher-ed space, we have relationships with 800 campuses across the country. And not in a relationship where we're paying them millions of dollars to be the sponsor in their arena or a branch on campus, et cetera, but we're solving a pain point for them to transfer payments to themselves from this from themselves to the students. And we get to then have a choice for these students to bank with us. And one in every three college bound students sees our account and has a chance to bank with us. Similarly, with T-Mobile. T-Mobile was looking to get into financial services. They want to create more touch points, more emotional connection with their customers around the mobile experience, and they're doing that today through T-Mobile Money which is in new checking account that we helped them launch. And so through our partnership, we're again, acquiring customers at relatively low cost and high volume. 

Insights: Will Brick-And-Mortar Banks Matter In The Future?

A discussion about startups known as challenger banks.

Will Brick-And-Mortar Banks Matter In The Future?

A discussion about fintech startups known as challenger banks and how these tech-driven, online-only upstarts will compete with big bank branches. (June 2019)

What are you going after? In terms of bank mobile, low and middle income Americans? That covers a large proportion. But you asked about, like, why now? And it's very obvious that consumer needs and behaviors are rapidly changing, and banks are really slow to adapt to that change. You know, we're seeing Americans living paycheck to paycheck. 1/3 of Americans doing so. 50% of Americans don't have enough to pay for a $400 emergency, and these same Americans are being charged $34 billion a year in just overdraft fees. That's more than what they're paying for vegetables. And so we're not only improving the consumer experience from affordability from technology innovation, more consumer friendly products trust. But we're also shifting the business where acquisition is branch based historically and banks, they're opening one net new checking account for branch per week. That's it. And today we're opening 10,000 accounts per week using technology and really, you know, creating a consumer centric product that they're looking for their really addresses their pain points. One product. I think that when I talked to both you and Chris that people really like is debit cards which surprised me a little because, you know, in order to build credit in origin, increase your credit score. Debit card isn't really serving you. How do you think about that? I mean, how are people Who, if they like using debit cards so much, how are they going to increase their credit? Well, I think it's important to help them with debit and offer them an opportunity to help them grow Their money saved their money, But we're not ignoring credit. I think that's one a huge pain point. Our customer base is in credit file and also lower near prime. And so we're focusing a lot on helping them build credit through products that we're offering and also from an education front. Make them understand. No, there's a lot of really savvy people. They don't even understand the components of what makes up a good credit score. And so there's a strong educational and coaching experience that we involved as well to make sure people are ready to take on credit and build that credit. One thing that I know both is very important to both of your businesses is you don't charge fees, no overdraft fees. Uh, no monthly account fees. Uh, credit card. Please be if you're going to do that. I mean, how committed can you be that this is what banking is in the bread and butter of banks for so long? How can you go up against the big banks without charging the fees? And doesn't that just make you much, much less profitable than traditional banks have been? I think we have a very strong competitors position relative to traditional big bank competitors. Do you know what it costs? Have a, uh, savings account at Bank of America. If you have less than $500 how much? $8 a month. That's the current price. And it cost $12 a month for a checking account if you don't have a large direct deposit or a big balance. So that's the segment we're going after. And by the way, that's a huge portion of America. I mean, you were deciding the staff of four something like 40% of Americans, one of $500 in a savings account. So it's a huge portion of America, and there's an opportunity service these people far more efficiently by not having a big branch infrastructure and having modern technology that isn't mainframe batch based. Everything's real time and easy. And so we think there's a great opportunity for delivering in a very sort of Amazonian way, you know, figure out ways to delight the consumer and wake up every morning and try to figure out how to reduce fees. That is not the way big banks. That's not what they think about when they come to the office each day. Because if you look at, you know, a Bank of America or Wells Fargo earnings call, every analyst on the call is asking about how did she and come due last quarter. And I'll tell you how it'd last quarter in Q one of 2019 the top three banks earned between 1.2 and $1.6 billion of service fees on deposit accounts. That's our opportune. Can you be profitable doing that by not charging fees? Well, our model today is primarily it's almost entirely interchange, so we make money when the car gets used at the point of sale. Whether that's a swipe for an Apple pay transaction and what's great about it, is there complete alignment with the consumer. We only make money if the consumers engage with our product and using it as an everyday transaction mechanism. So we're very motivated to get them excited to use it and use it for a cup of coffee or a big purchase at Walmart, ER or Amazon. So we're excited about being able to monetize in a way that is very much a line with the consumer's interests, but yes or no. Can you Do you expect to be profitable long term? Of course. Okay, yeah. I mean, we could be probable today if we weren't investing. I mean, literally, what could be probable this month if we weren't investing so much in brand building and customer acquisition efforts on television? And a lot of the marketing channels, as well as the investments were making in tow, Getting our consumers to refer their friends were really focused on profitability were actually right now, you know, part of a public company. And so banks that were after, I mean, sure, we have a charter. Banks are valued on profitability, but we have no choice but to create a model that's gonna lead us to either equal to or greater than profitability of a traditional bank. And how are we doing it? We're really focused on high volume acquisition and at very low cost. And so today we're acquiring our customers that essentially close to $0 we're doing it very high volumes. And the way that we're doing it at high volume is that we've gotten into a B to B to C model or banking as a service. So historically B to B to C could have been, you know, bank to Branch consumer. Today we're doing it bank through business, partner to consumer. And today, in the higher ed space, we have relationships with 800 campuses across the country and not in a relationship where we're paying the millions of dollars to be the sponsor in their arena or a branch on campus, etcetera. But we're solving a pain point for them to transfer payments to themselves from from themselves to the student, and we get to then have a choice for the students to bank with us and one in every three college bound students. He's our account and has the chance to bank with us. Similarly, with T Mobile, T Mobile was looking to get into financial service is they want to create more touchpoints, more emotional connection with their customers around the mobile experience. And they're doing that today through T Mobile money, which is the new checking account that we helped them launch and so, through our partnership, were again acquiring customers you know, a relatively low cost in high volume.

 ADAM LAHINSKY: Adam Dell who is now with Marcus, the Goldman Sachs unit, he said there's only two kinds of banks-- those who are screwed and those who don't know that they're screwed. Which one is Citi? MICHAEL CORBAT: Well, it's a bit of a Hobson's choice. But I think you're screwed if you're in denial. And I would say as an institution, we're absolutely not in denial. And to that soundbite that was just that, the next chapter of banking is being rewritten as we speak, the next chapter is digitally-led, the next chapter has a different set of expectations. And if we're status quo, you know what we are dead? But we're a 200-year-old institution that's reimagined itself several times, and we are very much in that process today. ADAM LAHINSKY: Great. I want to start with the reimagining that you're doing right now and that's your consumer banking strategy. And you're in the middle of something interesting in that you're trying to become a national consumer bank again after having retrenched from having been one. Explain how you're going about doing that. MICHAEL CORBAT: So we have a bank today, a depository bank today about 700 branches across the US that are predominantly located in six cities. Compare that against Chase, Wells, BFA, their branch counts in the thousands. What we have and what we think is an advantage we have is that we actually have a national credit card brand, that today, we've got about 28 million people in the United States that carry the city card. Only about less than 10% of those are actually bank customers. So I've got roughly 25 million people in the United States who carry a piece of our plastic. We know who you are, we know what you spend on, we know, by the way, who your bank is, we know what matters to you, and likely, we've probably got some affinity or reward program that resonates. It could be thank you points, could be American Airlines miles, could be double cash back. And so in there, how can I actually use that to convince you to be a bank customer. When you think of today's age, our ability to provide our branch, our bank mobile-y, probably never been a better time to be able to do that. ADAM LAHINSKY: So you have a very clearly defined addressable market and that's not that's not all of it. You'll take your cell banking services digitally to the people who aren't current customers. MICHAEL CORBAT: Absolutely. Today, what we're forced to run is actually two banks combined into one-- a digital bank that meets the needs of those that want a truly digital banking experience, and at the same time, the analog bank. Because if we take the analog bank away and say the branches are gone, you can't speak to anybody, we would lose some probably reasonable significant amount of our bank customers. Oftentimes in certain industries, things occur slower than people might predict. An the example I would use that we've lived is the ATM. Today, ubiquitous, everywhere. We have 60,000 of them in the United States. It was introduced in 1977. People often say that Citibank invented it. We didn't. We found it in a garage in Stockholm, Sweden. We commercialized it. The first year in the United States that branch count actually went down, i.e., there were less branches in the United States at the end of the year than the beginning of the year, was 2018. And at the time, people said, listen, today, I can take cash out of it. Pretty soon, I'll put cash into it. Pretty soon, it's going to be able to do all these things for me which today it can. Branch utilization has changed, but the demand around the branches are still there. And so when I think of this move to digital, it's a continuum of what I've described, those who expect the truly digital, to those that are living in analog with a big cohort in between, and a continuum that will move over time. ADAM LAHINSKY: And talk also if you would about cash because I feel like cash has been something of a dirty word at this event, and you don't think so. MICHAEL CORBAT: Well, again, going back to things create their own pace. What's interesting, if I ask the audience and said that two billion people in the United States-- and when you think about checks, we think of checks as being antiquated. I moved to the UK for the first time in 2000 and checks were pretty much already taboo. In the UK, we already had chip and pin. We didn't get chip and pin-- we still don't have chip and pin in the US. We have chip and signature here to 2019. But last-- ADAM LAHINSKY: It's kind of embarrassing. MICHAEL CORBAT: --there were almost $30 billion checks still written in the United States and cash utilization continues to rise. So again, shifts are happening, behaviors are changing, but they're going to come at their pace. And our challenge of running an established institution is we want to stay ahead, a couple steps ahead of our customers, but we can't get so far ahead we'd lose them. And so we want to make sure that we're developing the right things along the way but we can't get so far ahead that we lose them. 

Insights: How Citigroup Balances Digital and Traditional Banking 

The company is running "two banks" to meet customer needs. 

How Citigroup Balances Digital and Traditional Banking

CEO Michael Corbat explains how the company is running "two banks" to meet customer needs. 

Adam Dell, who's now with markets the Goldman Sachs unit, he said. There's only two kinds of banks. Those who are screwed and those who don't know that they're screwed. Which one is city? Well, it's a bit of a Hobson's choice, but I think you're screwed if you're in denial. And I would say is an institution were absolutely not in denial on to that sound bite that was just said that the next chapter banking's being rewritten as we speak. The next chapter is digitally led. The next chapter has a different set of expectations, and if we're status quo, you know what? We are dead. But we're 200 year old institution that's reimagined itself several times, and we are very much in that process today. Great. I want to start with the meat, the re imagination, re imagining that you're doing right now and that's your consumer banking strategy and you're in the middle of something interesting and that you're trying to become a national consumer bank again after having retrenched from having been one explain how you're going about doing that, so we have a ah bank today, a depository bank. Today, about 700 branches across the U. S that are predominantly located in six cities. Compare that against Chase wells B of A. Their branch counts in the thousands. What we have and what we think is on advantage we have is that we actually have a national credit card brand that today we've got about 28 million people in the United States and carry city card on Lee about, uh, less than 10% of those are actually bank customers. So I've got roughly 25 million people in United States carry a piece of our plastic. We know who you are. We know what you spend on. We know by the way who your bank is. We know what matters to you. And likely we've probably got some of 50 affinity or war reward program that resonates. It could be Thank you. Points could be American Airlines. Miles could be double cash back. And so in there. How can I actually use that to convince you to become be a bank customer? When you think of today's age, our ability to provide our branch, our bank mobile e probably never been a better time to be able to do that do you have a very clearly defined addressable market? And and that's not that's not all of it. You you'll take your cell banking service is digitally to the people who aren't current craps today. What we're forced to run is actually two banks combined into one a digital bank, that meat the needs of those that want a truly digital banking experience and at the same time, the analog bank. Because if we take the analog bank away and say the branches are gone, you can't speak to anybody. We would lose some probably reasonable, significant amount of our bank customers. Oftentimes, in certain industries, things occur slower than people might predict. And the example I would use that we've lived is theeighty m today ubiquitous everywhere, you know. We have 60,000 of them in the United States, was introduced in 1977. People often say that Citibank invented it. We didn't. We found it in a garage in Stockholm, Sweden. We commercialized it the first year in the United States. That branch count actually went down. I There were less branches in the United States at the end of the year than the beginning of the year, which 2018. And at the time people said, Listen, today I could take cash out of it. Pretty soon, I'll put cash into it. Pretty soon it's gonna be able to do all these things for me, which today it can. Branch utilization has changed, but the demand around the branches are still there. So when I think of this move to digital, it's a continuum of what I've described. Those who expect the truly digital to those that are living in a log with a big cohort in between and a continuum that will move over time and tonic. Also, if you would about cash, because I feel like cash has been something of a dirty word at this event, and you don't think so well again. Going back to things create their own pace. What's interesting If I asked the audience and said that two billion people in the United States and when you think about checks right, we think of checks is being antiquated. I moved to the U. K for the first time in 2000 and checks were pretty much already taboo in the UK We already had chip and pin. We didn't get chipping pin. We still don't have chip and pin in the US We have chipping signature right here in 2019. But a lot of bear. There were almost 30 billion checks still written in the United States, and cash utilization continues to rise. So again, ships were happening. Behaviors are changing, but they're gonna come with their pace. And our challenge of running and established institution is we want to stay ahead a couple steps ahead of our customers. But we can't get so far ahead. We lose them since we want to make sure that we're developing the right things along the way. But way can't get so far ahead that we lose him.

 SPEAKER 1: So we're a financial automation company, which means that we are building a service that can do all of your financial thinking and your financial work. And so we started about four and 1/2 years ago building what is now the first and only automated debt manager. And it helps people get out of credit card debt faster and save money along the way. And then we recently added an automated saving service that helps people save towards a goal or build a rainy day fund. And ultimately, what we're working towards is to be able to do all of the financial thinking and work for consumers, so that they can set really big objectives, like I want to be a homeowner. And along the way, we're getting rid of their card debt, saving a down payment, improving their credit score, and then eventually financing a home. So it's about being able to really take that emotional and cognitive load off of consumer's shoulders and do that in an automated fashion with software. SPEAKER 2: So walk us through exactly how this works. SPEAKER 1: So with Tally, you just download the app, scan in your cards. And then, we actually take responsibility for paying your cards for you, and then you pay Tally. And the advantage there is anytime we detect you're getting charged interest by the cards, we actually sweep over your balances overnight, and move them over to Tally at a lower rate. And we guarantee you're not going to have any late fees. The way our algorithms manage your cards, they get you out of debt quite a bit faster. And our average customer saves over $5,000 in interest. Taking a look at Tally cards, we only can make money if we're actually saving a customer money on interest. So people were using Tally that, let's say, don't have any interest charges, they get to use Tally for free, and they get all the benefit, which we're fine with. But anytime we can see, hey we can save you money, we're going to do so. And then Tally will actually earn revenue. So I think it has to do with just the general focus around what is best for the consumer mathematically and doing that. And I think that's the power of having computers do your financial work because let's just take a real human financial advisor, right? They're supposed to be doing what's best for you, but are they getting fees and incentives from different financial products to kind of nudge you in one direction or another? Whereas Tally effectively has an auditable log. And every decision that the system made on your behalf, we can justify why mathematically that was the best thing to do at the time. And even 100 years from now when I'm dead and gone, if let's say, auditors want to come in and look at what happened, there's actual trail on every single move. So that's one of the things that I get excited about, is moving actually away from human advisors into computer systems where you have that kind of mathematical accountability. 

Insights: How Automation is Ushering in the Third Wave of Fintech

Jason Brown, CEO of Tally, discusses the future of fin tech.

Automation is Ushering in the Third Wave of Fintech

Jason Brown, cofounder and CEO of Tally, stops by the Fortune studios to discuss the future of financial technology. (November 2019)

We're a financial automation company, which means that we are building a service that can do all of your financial thinking and your financial work. And so we started about four and 1/2 years ago, building what is now the first and only automated that manager. And it helped people get out of credit card debt faster and save money along the way. Um and then we recently added an automated saving service that helps people save towards a goal or build a rainy day fund. And ultimately, what we're working towards to be able to do all of the financial thinking and work for consumers so that they can, you know, that really big objective, like I want to be a homeowner. And along the way we're getting rid of their card, that saving it down payment, improving the credit score and then eventually financing a home. So it's about being able Thio, really? Take that that emotional and cognitive load off consumer shoulders and do that in an automated fashion with software, So walk us through exactly how this works. So with Sally, you just download the APP scan in your cards and then we actually take responsibility for paying your cards for you and then you pay tally and the advantage there is. Any time we detect, you're getting charged interest by the cards. We actually sweep over your balances overnight and move him over. Thio tally at a lower rate, and we guarantee you're not gonna have any late fees. The way our algorithms manage your cards, they get you out of that quite a bit faster. And our average customer saves over $5000 in interest. Taking a look, a tally cards we on. Lee can make money if we're actually saving a customer money on interest. So people were using tally that Let's say I don't have any interest charges. They get to use tally for free and they get all the benefit which were fine with. But any time we can see hey, we can save you money, we're going to do so and then Tally will actually earn revenue. So I think it has to do with just the general focus around what is best for the consumer mathematically and doing that. And I think that's the power of having computers to your financial workers. Let's just take a real human financial advisor, right? They're supposed to be doing what's best for you. But are they getting fees and incentives from different financial products to kind of nudge you in one direction or another? Where's tally effectively? Has an auditable log in every decision that the system made on your behalf weaken justify? Why mathematically, that was the best thing to do at the time and even 100 years from now, when I'm dead and gone. If you know, let's say auditors want to come in and look at what happened. There's actual There's actual trail on every single move. So that's one of the things that I get excited about, it moving actually away from human advisers into computer systems, where you have that kind of mathematical accountability.

 JEN WIECZNER: Betterment now advises $17.9 billion in assets. It's what some might call a robo-advisor, so this is kind of like said it, forget it investing-- you invest, go into ETFs and it's kind of automatically rebalanced. You are also launching into some new products, so tell us a little bit about that. JON STEIN: Right, so what we've been known for is bringing the very best technology to money management. Starting with your investments, everyone knows that we help our customers make the most of their long term money. But as we've gone down this journey, we've heard from so many customers that to get them further down there, it would help if we could better manage their everyday cash, their everyday money. And if we can help them save a little bit more, that's super impactful. So we're launching both a savings account and a debit card with a checking account attached, that I believe will be the best in market of both of these products. The savings account is going to have what is the highest rate in the market. Today, it's yielding 2.69%, which makes it by far the highest yielding savings account. The debit card is going to have no fees at all whatsoever, no minimum balance, no fees on any ATMs, no network restrictions, nothing like that, and internationally free ATMs as well. So really, market-leading products for all of our customers who are looking to make the most of their everyday cash. One of the things that we've done is really intelligently structure this product. So we've negotiated with multiple banks. We're working with a range of banks on the back-end, just like we do on the ETF side. We're able to choose the best ETFs from multiple providers to give the very best value to our customers. And as an independent advisor, we're always working for our customers. We're always working to make the most of your money. A bank only makes money if they pay you less. We're able to get the very best rates in market and we pass all of that onto our customers. And that, I believe, is extraordinary value that we can provide as the market leading smart money manager. JEN WIECZNER: You're not making any money off this because you're just passing along everything that you're making from the banks and interest. How do you plan to make money from this? JON STEIN: So one of the ways that we make money, in fact, the only way we make money today is through our advisory fee that we charge for the advice we provide on your investments. That's 25 basis points. It's, I believe, the lowest in the market. We continue to provide that service at the same cost for all of our customers. We would hope that some customers come to us, and because we have this market leading rate, you're going to say, well, I'm interested in checking out Betterment. By the way, we also earn you more than anybody else on your retirement money. We earn you 40% more on average over the long term than you could if you even invest in the same ETFs that you could buy through us on your own-- JEN WIECZNER: Investment returns or savings? JON STEIN: Investment returns. JEN WIECZNER: So you can promise that? JON STEIN: Well, nothing is promise-able over the long term, but yes. Because of our tax optimization on average and over time, the average customer will have 40% more cash. It might be more, it might be less. But that's the average expectation based on the algorithms that are running today. And we're just getting better and better every year. We're getting smarter and smarter. Our technology is getting better. ROBERT HACKETT: A lot of big companies, a lot of big banks, they've been really releasing their own robo-advisors. We've seen Fidelity, Schwab. JP Morgan just recently came out with one, and they've been slashing fees left and right. JP Morgan doesn't charge you. I believe it's on the ETF fees that waives those fees. So with all of these fees coming down to maybe zero across the board, how will that affect the fees that you take out in your product? JON STEIN: So we haven't seen zero yet. So I think there's a difference between zero and something. JP Morgan product is at 35 basis points, which is more expensive than ours, even after you factor in ETF costs. And remember, we're able to choose the best ETFs from all of the providers out there. We don't have any backdoor deals to make money off of ETFs. Every other competitor in the market is either double dipping by offering you their own funds which they make more money on and which aren't in your best interest, or they have some kind of payment system that's not in your best interest. We only make money on that advisory fee and that independence means that we're always acting in your best interest in giving you the very best funds. 

Insights: Betterment Launches Savings Account with 2.69% APY

They also have a no-fee checking account.

Betterment Launches Savings Account with 2.69% APY

It’s part of their new Betterment Everyday suite of products, which also includes a no-fee checking account. (July 2019)

Betterment now advises $17.9 billion in assets. It's what some might call a robo adviser. So this is like said it. Forget it, investing. You invest going T APS, and it's kind of automatically re balance. You are also launching into some new products, so tell us a little bit about that, right? So what we've been known for is bringing the very best technology to money management, right? Starting with your investment, everyone knows that we help our customers make the most of their long term money. But as we've gone down this journey, we've heard from so many customers that get them further down there. It would help if we could better manage their everyday cash, their everyday money and if we could help them, save a little bit more that super impactful. So we're launching both a savings account and a debit card with a checking account attached that I believe will be the best in market of both of these products. The savings account is going to have what is the highest rate in the market today. It's yielding 2.69% which makes it by far the highest yielding savings account, the debit card is going to have no fees at all whatsoever. No minimum balance, no fees on any A T m, no network restrictions, nothing like that. And internationally create Hamza's well, really market leading products for all of our customers who are looking to make the most of their everyday cash. One of the things that we've done is really intelligently structure this product. So we've negotiated with multiple banks were working with a range of banks on the back end, just like we do on the side, right? We're able to choose the best DTs from multiple providers to give the very best value to our customers and as an independent advisor were always working for our customers always working to make the most of your money. A bank on Lee makes money if they pay, you left were able to get the very best rates in market, and we pass all of that on to our customers and that I believe this extraordinary value that we can provide is the market meeting. Smart money manager. You're not making any money off this because you're not. You're just passing along everything that you're making from the banks and interest. How do you plan to make money from this? So one of the ways that we make money. In fact, the only way we make money today is through our advisory fee that we charge for the advice we provide on your investments. That 25 basis points, I believe the lowest and the market. We continue to provide that service a TTE the same cost for all of our customers. We would hope that some customers come to us because we have this market leading rate. They're gonna say wow, like I'm interested in checking out betterment. By the way, we also earn you more than anybody else on your retirement money, right? We we earn you 40% more on average over the long term. Uh, then you could if you even invest in the same e. T s, that you could buy through us on your own because our savings investment returns, huh? So you can promise that Well, thing is promising below over the long term. But yes, because of our tax optimization, on average, over time, the average customer will have 40% more cash. It might be more. It might be less. But that's the average expectation based on the algorithms that are running today. And we're just getting better and better every year. We're getting smarter and smarter. Technology is getting better. A lot of big companies, a lot of big banks. They've been re releasing their own robo advisers. We've seen Fidelity Schwab J. P. Morgan just recently came out with one and even slashing fees left and right. J. P. Morgan doesn't charge you. I believe it's on the E T F waves, those keys. So with all of these fees coming down to maybe zero across the board, how will that affect the fees that you take out in your product? So we haven't seen zero? Yes. Um, uh, So I think there's a difference between zero and something. The GP Morgan product. Is it 35 basis points, which is more expensive than ours, even after you factor in e t f. Cotton. And remember, we're able to choose the best e t f from all over the providers out there. We don't have any backdoor deal to make money off of E. T. F. Every other competitor in the market is either double dipping by offering you their own funds, which they make more money on and which aren't in your best interest. Or they have some kind of payment, you know, system that's not in your best interest. We only make money on that advisory fee, and that independent means that we're always acting in your best interest in giving you the very best fund.

[MUSIC PLAYING] SPEAKER 1: Goldman Sachs has never been in the consumer business in its entire 100 something year history. SPEAKER 2: 150 years. SPEAKER 1: 150. And now, you've only recently decided to do it. What is Marcus? SPEAKER 2: So Marcus is Goldman's global consumer business. Our purpose is to disrupt the distribution and consumption of financial services. Pretty much what Amazon has done and is doing to retail or what Apple did to the music industry. We believe we can do that, and we are early days. This is our third year. We have four million customers. We have close to $50 billion in deposits. In fact, we should be hitting $50 billion in the next few hours. OK. Or maybe by tomorrow. We've announced, as you said, a core brand with Apple. We purchase clarity money, which is a series of very forward leaning personal financial management tools to be the consumer's advocate, which we are planning to rebrand into Marcus over the next few quarters. SPEAKER 1: You have no branches, so which makes you a challenger bank, which is the expression we've been using this morning. So fascinating. Goldman Sachs is a challenger bank. And banks typically have many, many products. Wells Fargo used to brag about how many different products it would cross sell you. And until you launch with Apple, you have one product. Tell everybody what it is and why just one. SPEAKER 2: Well, we have more than one product. We have personal loans between where we give unsecured personal loan from $3,500 to $40,000. We have savings accounts and CDs. We have a series of money management tools what we call the personal financial management tools. And now, we have the credit card. But the important thing is-- so when we look at the consumer financial services business, we have very, very, very focused on making life easy for the consumer and building a business, which is attractive for the shareholder. What consumers want is simple, transparent, not complex. That's what they get from the banking industry as a whole. And when they see complexity, they lose trust. 70% plus of millennials would rather visit the dentist than the bank branch. And that's a pretty low bar. OK. And it's actually sad that those are the 60% of the consumers in America don't trust a bank or credit card company. SPEAKER 1: Talk about the fees that you charge customers and why the Goldman Sachs balance sheet is part of your answer to that question. SPEAKER 2: So the fee we charge to the consumers is a big number called zero. So for example, in our loan's business, no prepayment fee, no origination fee, no late fee. In our card that we've announced as Apple made the announcement in the features, which are there on the site, no fees. In deposits savings accounts, no fees. The reason is we are a balance sheet player, as you said. We earn-- in fact, some customers were so incredulous when we launched loans that there are no fees. We have a section on the site saying how do we make money. SPEAKER 1: How do you make money? SPEAKER 2: We make money on net interest margins. And that-- SPEAKER 1: That's extremely old fashioned, isn't it? SPEAKER 2: It is extremely consumer friendly. And the reason we can do that as you rightly said is we have a unique structural competitive advantage. We are in a category of one. We are the only large bank which doesn't have a legacy consumer business, legacy technology, legacy branch network. We can start afresh, and unlike the fintechs, we have a balance sheet. We have a risk management DNA, and we have a brand. 

Insights: Goldman Sachs Breaks Into the Consumer Business

The investing institution has launched a consumer product.

Goldman Sachs Breaks Into the Consumer Business

The storied investing institution has launched a consumer product that challenges conventional consumer banks. (June 2019)

[MUSIC PLAYING] SPEAKER 1: We really started TransferWise because my myself and my co-founder, Christa, we were sending money between Estonia and UK, and we realized that whenever we go to a bank, we get a horrible service. It's slow, expensive, and really inconvenient to you, stand in line, wait days for money to arrive. So we thought about, wait, it's the 21st century, emails go instantaneously, there might be something we can do to have the same experience with money. So we realized that in order to do it, we really have to go and build out our own infrastructure. So in every country, we tried to connect to the payment network. So we take money from a customer. Really quickly for a low cost, we're able to convert it and then pay out to the recipient. And if we're lucky, we can do it in real time in many countries we're in. SPEAKER 2: How long does it usually take for the money to arrive? SPEAKER 1: You can send money from Australia to UK, it'll be there in 15 seconds. SPEAKER 2: Your main competitors are Western Union and the banks of the world, but you only charge 1% or less in fees, how are you able to keep your fees so much lower than these others? SPEAKER 1: So really it comes down to a few things. It comes down to being online only. So we don't have a branch network to support. It's only on your smartphone or computer, so that makes things easier for us. Second, we're really focused on being a technology company, so we're using technology to make things smoother and faster. And being started only seven years ago means we're doing things in a very modern way compared to a bank, which may have systems dating back tens and tens of years. And lastly, being straightly connected in the payment systems in every country means that we don't pay fees to any intermediaries that result in us being able to offer the lowest price, which really allows us to offer these services and run a profitable business. 

Insights: TransferWise Cuts Cost and Time of International Money Transfers

TransferWise Cuts Cost and Time of Money Transfers

TransferWise cofounder and chairman Taavet Hinrikus wanted to cut out the middlemen. (November 2018)

way Transferwise because myself and my co founder, Crystal, we were sending money between Estonia and you can realize that you never go to a bank. We get the horrible service. It's slow, expensive and really inconvenient to you standing, lying in wait day for money to arrive. So we thought about Wait, it's a 21st century e mails going spontaneously. Must be something we can do to have the same experience with money. So we realized that in order to do it really have to go and build out our own infrastructure. So in every country we try to connect the payment network. So we take money from a customer really quickly for low cost. We're able to convert it and pay out to the recipient, you know? And if and if we're lucky, we can do it in real time in many countries were in How long does it usually take for the money to arrive? You can send money from Australia to UK. It'll be there in 15 seconds. Your main competitors are Western Union and the banks of the world. But you only charge ah 1% or less in fees. How are you able to keep your fees so much lower than these others. Really? It comes down to a few things. It comes down to being online only. So we don't have a brunch central to support its only on your smartphone or a computer. So that makes you here for us. Second in a really focused on being a technology company. So we're using technology to make things smoother and faster. And being started only seven years ago means we're doing things in a very modern way compared to a bank which may have systems dating back tens and tens of years. And lastly, you know, being being straightly connected in the payment system. And every country means that we don't pay fee Sonny Intermediary that kind of result in us being girls offer the lowest price, which really allows us to offer this service ship and run a profitable business.

[MUSIC PLAYING] SPEAKER 1: So let's kick it off. What is Compound? Tell us about your company. SPEAKER 2: So Compound is a protocol built on the Ethereum blockchain to create interest rate markets for Ethereum tokens. What I mean by that is we're creating a short term creditless spot interest rate that fluctuates in real time based on supply and demand. So a user can earn interest by supplying an asset to one of our markets, and similarly, a user can borrow an asset from one of our markets, assuming that they have enough collateral such that there's no credit risk that they expose the protocol to. SPEAKER 3: To simplify it for a sec though, the idea behind this is that you don't get any interest holding crypto, even savings accounts in real world are paying interest. But right now, if you have your crypto exchange and a wallet, you don't get it, right? SPEAKER 2: That's right. The interest rate on most crypto is zero, because you're not able to let other traders or individuals use your crypto. And so what we're trying to do is to create a marketplace where all cryptos are used and is interest generated. SPEAKER 1: And this is focusing on coins and tokens that are not the value-- they don't have the same value proposition of a bitcoin where you're not really seeking an interest rate on bitcoin, because it's a speculative bet that your expecting is going to appreciate in value given the deflationary aspects of the system. So this solves a separate problem. SPEAKER 2: It does. Although, I would love to point out that bitcoin, assuming it can be recognized at some point as a currency, should have an interest rate, because there should be demand for that currency from other individuals, traders, and funds. SPEAKER 3: And the interest rates you envision. They're almost like repos. This is very short term, right? SPEAKER 2: That's right. They're designed to be extremely short term and without credit risk. So the alternative approach to creating an interest bearing instrument is a loan to another trader or another fund. Our system, you're not interacting with other peers directly. You're simply supplying assets to a market, which is liquid. You can redeem your assets at any time. It's ultra short term. You could supply assets for five minutes, which is appealing to programmatic traders and arbitragers. And it allows there to be a lot more flexibility in locking up an asset in a loan. SPEAKER 1: We chatted before, and we've been catching up on some of your own views on crypto. And you're actually a skeptic of a lot of the crypto assets that are out there. Can you speak a little bit about your thoughts? SPEAKER 2: Yes. So I'm a little bit skeptical of crypto native assets in general, simply because a lot of them have been designed for capital formation and not for fulfilling a specific goal. An easy summary is a lot of the tokens have been created in the last two years are pretty much vaporware. I don't mean that for every single one. There's obviously some projects that are of extreme caliber and integrity. But for the most part, tokens have been used to raise capital, not because they're needed. And I think we're approaching an era in which eventually there is going to be a come to Jesus moment, where projects have to put up or shut up, and their token has to have value or create value or it will eventually become extinct. SPEAKER 3: So it's like the long game for you might not be a lot of these vaporware tokens, but you're talking about real currencies like yen and euros and sterling and dollars. Do you want to tell us a little more about that? SPEAKER 2: Yes. The overwhelming trend we see is the tokenization of real world assets. You're starting to see that with the US dollar in the creation of stable coins. The next step in this is the tokenization of other currencies, eventually other real world assets, and eventually securities. In a 10 to 20 year spectrum, we believe that most assets are going to be tokenized. And in that universe, all of the crypto native tokens that have been created over the last couple of years look a lot less appealing, and so what our vision is is that eventually, we'll be creating interest rate markets for the real world assets that happen to exist in crypto form. 

Insights:  Compound Aims to Create Interest Market For Crypto

Compound CEO Robert Leshner shares his vision.

Compound Aims to Create Interest Market For Crypto

Compound CEO Robert Leshner shares his vision for creating interest rate markets for tokenized real world assets. (November 2018)

Let's kick it off. What is compound? Tell us about your company. So compound is a protocol built on the ethereum Blockchain to create interest rate markets for ethereum tokens. What I mean by that is we're creating a short term credit lis spot interest rate that fluctuates in real time based on supply and demand. So a user can earn interest by supplying an asset to one of our markets. And similarly, a user can borrow an asset from one of our markets, assuming that they have enough collateral such that there's no credit risk, that they expose the protocol to to simplify it. For a sec, though, the idea behind this is that you don't get any interest holding crypto. Even savings accounts in the world are paying interest. But right now, if you have your cryptic exchange in a wallet, you don't get it right. That's right. The interest rate on most crypto is zero because you're not able to let other traders or individuals use your krypton. And so what we're trying to do is to create a marketplace where all Kryptos used and is interest generated and focusing on coins and tokens that air not the value. They don't have the same value proposition of a Bitcoin where, you know, you're not really seeking an interest rate on Bitcoin because it's a speculative bet that you're expecting is going to appreciate in value, given the sort of deflationary aspect of the system. Um, so this kind of solve the separate problem? It does. Although, you know, I would love to point out that Bitcoin, you know, assuming it can be recognized at some point as a currency should have an interest rate because there should be demand for that currency from other individuals, traders and funds and the interest rates to envision this. Is there almost like repose this very short term, right? They're designed to be extremely short term and without credit risk. So the alternative approach toe creating an interest bearing instrument is alone to another trader or another fund. Our system. You're not interacting with other peers directly. You're simply supplying assets to a market which is liquid. You can redeem your assets at any time. It's ultra short term. You could supply assets for five minutes, which is appealing thio programmatic traders and arbitrageurs, and it allows her to be a lot more flexibility and locking up an asset in alone. We've chatted before, and we've been catching up on some of your own views on Krypton, and you're actually a skeptic of a lot of the crypto assets that are out there. Can you speak a little bit about your thoughts? Yeah. So, you know, I'm a little bit skeptical of Krypton native assets in general, simply because a lot of them have been designed for Capital Formacion and not for fulfilling a specific goal. You know, easy Summer is a lot of the tokens have been created last two years of pretty much vaporware. I don't mean that for every single one, there's obviously some projects that are extreme caliber and integrity. But for the most part, you know, tokens have been used to raise capital, not because they're needed. And I think we're approaching an error in which eventually there's going to be, you know, come to Jesus moment where you know, project have toe put up or shut up, and their token has to have value or create value, or it will eventually become extinct. Like the long game for you might not be a lot of these vaporware tokens. But you're talking about real currencies, like yen in euros, sterling and dollars total more about that. Yeah, The overwhelming trend we see is the token ization of real world asset. You're starting to see that with the U. S. Dollar in the creation of stable coins, the next step in it is the totalization of other currencies. Eventually other real world assets and eventually, securities. You know, in a 10 to 20 year spectrum, we believe that most assets are gonna be token ized. And in that universe, you know, all of the krypton native tokens have been created over the last couple years, look a lot less appealing. And so what our vision is that eventually will be creating interest rate markets for the real world assets that happen to exist in crypto form.

[MUSIC PLAYING] SPEAKER 1: We're an investment platform. We allow people to trade US equities, options, and cryptocurrencies commission free, so no portrayed charges on all three of those. We're available on mobile and on web as of late last year in the US. SPEAKER 2: You guys have said that you plan to offer banking services in the future. I think you've even said you hoped to offer everything that Bank of America offers, and you guys just raised $363 million series D round valuing it at $5.6 billion. So you've been compared to the Amazon of financial services, but do you really want to be a bank? I mean, is that what you see yourselves becoming in the future? SPEAKER 1: Well, the way we think about it is we want to solve customer problems and the precise regulatory structure. We figure out around the problem. So it became pretty clear at first when we wanted to launch the stock trading product that we had to be a FINRA registered broker dealer. So we went in and got those licenses. But we didn't start saying, OK, let's be a FINRA broker dealer. What can we do now that we have that license? It started out by understanding that customers are getting ripped off in investing and trading. They're paying up to $10 a trade, sometimes even more. There's high account minimums. And the user experience, I mean, these services effectively haven't changed for 10, 20 years when you look at discount brokerages. And we took that approach organically to options trading, where customers are getting charged even more for making options trades. You get charged twice per transaction in two different ways, and some customers came to us and said, well, we're paying thousands of dollars a day in trading fees. So they wanted that product out of us. And we figured out how to make that happen. We don't intend to make very much money on it at all for the foreseeable future. We intend to operate it as a break even business. And the thinking behind that is that what we're really doing is building an ecosystem. Right now, the products are investing products, so crypto slots in very nicely alongside the 10,000 plus other instruments that people can trade. And we think of monetizing a customer across a wide variety of different products in our ecosystem, including Robinhood Gold, which is the most direct subscription pricing model. SPEAKER 3: So you attract new customers through their very good prices on crypto and then up sell them on other things. SPEAKER 1: Exactly, and we saw a lot of that happening. When we announced crypto, we had some of our biggest days ever where a lot of new customers joined the product and-- SPEAKER 2: You said hundreds of thousands of customers on some some days. SPEAKER 1: Yeah. Exactly. And those customers actually started investing in many other things, not always crypto. They were investing in options and equities and a lot of them subscribed to Robinhood Gold, so we're looking at crypto as a one way for customers to actually see the value prop of our broader product. I mean, we're selling them financial services, and they can find out about us depending on what they're most interested in. For some customers is crypto. Others is they want to invest in a stock for a company that they care about. SPEAKER 2: It's pretty unusual for a brokerage of any sort to not charge any commission fees. I mean, that has been the bread and butter of the business for years and years. And other than you guys and Corbin Hood, which is-- before you guys were in crypto, the crypto knock off of Robinhood. Why is the no fee model so important do you think? SPEAKER 1: I definitely think it's where the industry is going. I think-- I mean, if you look at our business, I mean we've been able to make it work, because the cost is very, very low in offering these services. It wouldn't have been possible 10, 20 years ago, for example, because markets weren't fully electronic. 

Insights: Robinhood’s Crypto Trading Crystalizes Its Vision For A No-Fee Future

They believe no-fee will be the model of the future.

Robinhood Crystalizes Its Vision For A No-Fee Future

Robinhood Co-CEO Vlad Tenev chats about the commission-free service, and why no-fee will be the model of the future. (June 2018)

We're a Nen vestment platform. We allow people to trade US equities options and crypto currencies Commission free. So no portrayed charges on all three of those were available on mobile and on Web. As of late last year in the U. S. You guys have said that you plan to offer banking services in the future. I think you said you hoped offer everything that Bank of America offers on you guys. Just raised $363 million series B round valuing Robert A 5.6 billion. So you've been compared to the Amazon, A financial service. But do you really want to be a bank? Is that what you see yourselves becoming in the future? Well, the way we think about it is we want to solve customer problems and the precise regulatory structure. We sort of figure out around the problem. So it became pretty clear at first when we wanted to launch the stock trading product that we had to be a thin row registered broker dealer. So we went in and got those licenses. But we didn't start saying, OK, let's be offender. A broker dealer. What can we do with now? that we have that license. It started out by understanding that customers are getting ripped off in investing and trading. They're paying up to $10 a trade, sometimes even more. There's high account minimums and the user experience. I mean, these service is effectively haven't changed for 10 20 years when you look at discount brokerages and we took that approach kind of organically toe options trading, where customers are getting charged even more for making options trades. You get charged twice per transaction in two different ways, and some customers came to us and said, Well, we're paying thousands of dollars a day in trading fees So they wanted that product out of us and we figured out how to make that happen. We don't intend to make very much money on it at all for the foreseeable future. We intend to operate it as as a break even business. And, um, the thinking behind that is that what we're really doing is building an ecosystem. Right now, the products are investing products so crypto slots in very nicely alongside the 10,000 plus other instruments that people can trade, and we think of monetizing a customer across a wide variety of different products in our ecosystem, including Robin Hood Gold, which is sort of the the most direct subscription pricing. Attract new customers to the very good prices on Krypton and sell them on other things. Exactly. And we saw a lot of that happening when we announced crypto we had some of our biggest days ever wear a lot of new customers joined the product and hundreds of thousands of customers on Sundays. Yeah, exactly. And, uh, you know, those customers, actually, you know, started investing in many other things, not always crypto. They were investing in options and equities, and a lot of them subscribed a Robin Hood gold. So, um, we're looking at crypto as, ah, one way for customers to actually see the value prop of our broader product we're selling them. Financial service is, and they can find out about us depending on what they're most interested in for some customers and crypt crypto others, they want to invest in a stock for a company that they care about. It's pretty unusual for brokerage of any sort. To not charge any commission season mean that has been the bread and butter of the business for years and years. Um, you know another than you guys in common hood, which is, you know, before you guys were in crypto crypto knockoff of Robin Hood. Why's the no fee model? Um so important? Do you think I definitely think it's where the industry is going? I think, uh I mean, if if you look at at our business, we've been able to make it work because the cost is very, very low in offering the service is it wouldn't have been possible 10 20 years ago, for example, because markets weren't fully Elektronik.

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