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Fintech is a Big Thing. India is a vast sub-continent. Naveen Bindal, the co–founder of Enkash which is India‘s largest spend management Fintech, joins us to discuss Fintech in India which was one of the first movers in Fintech worldwide and is now by some measures the world’s  third largest Fintech marketplace.

Naveen started his career some 23 years ago as a developer in a credit card company working on payment processing and with banks.

Having been involved in the Indian FinTech space for some 10 years along with his co-founders who each also have two decades in FS and tech under their belts he is well-placed to guide us through its evolution past, present and future.

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There is a real art to how a founder manages his companies equity. If he gives it, or its derivative, share options, away too fast for too little value – whether funding or staff – he will be giving away his creation on the cheap and losing control fast. Vice versa hoarding it to himself will produce inadequate funding and not top-notch senior staff. If this is the spectrum then there is in addition a whole dimension of the terms and conditions over equity schemes. There are plenty of hidden elephant traps for the unwary even for “Day1 co-founders” (eg a simple 50:50 split yet one co-founder puts most of the work in…). Furthermore we have what was “pre-tech” an administrative nightmare of managing hordes of shareholders and regulations/laws thereto. Vestd who formed in 2014 and have thousands of companies on their platform offer a “guided SAAS” product where the platform is closely allied to tons of experience in re.

Founder and CEO Ifty Nasir formed the company in 2014 after a lifetime’s international career with BP and considerable experience on the internal corporate finance side of deals and equity including at one point hiring Lord Sumption on a challenging deal. He joins us today to discuss the whole “how hard can it be” (as always “harder” and in this case “quite nuanced”).

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AI/ML has been around for a long time but recently hit the headlines with ChatGPT which has broken every tech record in the book for a piece of tech that attracts users faster than any other tech ever. If Generative AI is the hot topic of the day though what is happening behind the scenes with more prosaic Fintech use cases. Tristan who is CEO of commodity price predictors and now Insurtech ChAI first joined us in 2016 for an an overview of AI/ML and updated us more recently in 2019 to talk about then hot-topics. What has changed – what is with Generative AI, what are the behind the scenes factors driving change, how are fintechs being invested and indeed how is investment in Fintech being affected by AI?

We first heard from Tristan a long-term academic and Fintech-er in the whole AIML realm in 2016 for an overview of the topic which has remained in the top 5 most downloaded episodes of all time. In 2019 re joined us to discuss hot topics in AIML in particular prediction, explicability, alt. Data sources and self learning.

Three factors have been driving an astonishing rate of change – computing power (NVIDIA been increasing by a factor of 10 every year in recent years), an abundance of data sources beyond all recognition even a few years ago and advances in computer science – not least of which Transformers (the T in GPT and a leap forward from RNNs), so-called self-attention and RLHF – reinforcement learning from human feedback. In the image space the likes of, GANs (Generative Adversarial Networks), Latent Diffusion Models and the clever use of efficiency gains.

Taking the current eye-catcher as a metric GPT1 was released in 2018, GPT2 in 2019 and GPT3 in 2020 with its offshoot ChatGPT in 2022. GPT3 has 176bn parameters compared to GPT2’s 1.5bn and was trained on 570GB of data compared to 40GB. Huuuge changes.

But this is just the sexiest, most public face of AIML which as a whole has been finally one might say getting somewhere are computing power continues to increase. As we heard in LFP219 the ex-GCHQ-ers at Ripjar have a database of 18bn news articles which they can process. Once one gets to this kind of scale of computing then – even avoiding the unfortunate anthropomorphism implicit in terms like intelligence or learning – if we simply revert to the oldskool term data processing then we are getting to a stage where the results from data processing are truly phenomenal. Even I have shifted to keeping track of the latest developments having been pretty sniffy about the uber-hype of a field that generally failed in most of its initial objectives set out by pioneers in the 60s.

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Financial Services is all about Finance which is all about money. However almost all FS employees just accept “money” as a thing in the same way they accept gravity. Which is an odd thing if you think about it. Most of the time this wouldn’t matter but at turning points such as we are at now if can be disastrous, What money is and the regimes around it have varied widely over time and space. However it is true to say that Central Banks are a total exception – indeed the ne plus ultra of Big State Centralism (which is leading to so many problems).

Most FS-savvy folk know that a dollar when the Fed was created in 1913 is worth a few cents now – not a great testimony to the performance of an institution whose job is to “protect” the dollar. Few appreciate the intimate connection between monetary collapse and societal collapse. Examples however are  legion with perhaps the best known being Rome (see what I did there re legion? :-D) , Revolutionary France or the Weimar Republic. As the fallout from those were respectively a civilisational collapse in the West that literally took centuries to recover from and two brutal dictatorships we would be well advised to pay attention to this otherwise recherché topic.

Central Banks are profoundly antidemocratic and as we saw in 2008 in the US and the UK chose – unlike Iceland – to bankrupt their people in order to preserve the wealth of banks and bankers bonuses. Prima facie they seem to correlate to the greatest frequency of wars ever, higher inflation and government spending and a de facto tax on savers and the elderly. At a minimum there is a difficult charge sheet for them to address.

Mario who runs the highly successful YouTube Channel maneco64 is a long term student of the history and current practice of monetary policy as well as like me decades ago having worked successfully in the City without having any real understanding of money per se.

Mario joined us a year ago in LFP197 to discuss “Money in the 21stC: Ballooning Printing of Fiat/QE/”MMT”/Govt Debt, CBDCs, Crypto, Dedollarisation, Hyperinflation, Gold”. In this episode:

• Mario updates us on what has happened over the past year re money and multipolarity and where this is all going
• we dive into an assessment of – simply put whether Central Banks Are A Good Thing
• Mario outlines what he would do to rebuild society and money if in a parallel universe he was Governor of the Bank of England or indeed if western money and societies collapse and need to be rebuilt
• Mario looks forward to how Gold is becoming more important in a multipolar World. Central Bank buying of Gold was at its highest level in 2022 since 1967 and China has started releasing its monthly purchases thereof

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Increasing automation is what the tech revolution is about – by definition. In this episode we dive into this topic starting at the highest levels – Government intelligence community quality tech at GCHQ (where Jeremy and his four co-founders had been long-term employees) and the immense value of technology transfer between state and private sectors. We then move through some of the more challenging questions of definition of terms (super-relevant for computers and their usage by business) and that these terms (eg crime, terrorist et al) vary per location – a real challenge for global enterprises.

Finally we move on to a particular speciality of Ripjar (who recently completed a $37m raise) – adverse media screening  – which is not – as it sounded to me – a PR function but rather the automated processing of billions of news articles for credit/regulatory/business relevance re, as it were, early-warning/detection of say credit or regulatory or ethical problems with clients while these are still over the horizon rather than at the front door (or inside it) of the business.

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This 2023 New Year Special forms the fifth is a series of five about how technology is changing us directly and indirectly by empowering tyrants. It is by far the most ambitious, empowering and positive of all suggesting that we use the insanity as a spur in our sides to seek to flee Plato’s cave, escape the Matrix and speed up our path to awakening in search of love, light and healing.

Sound like a cool topic, a worthy goal to you?

It has five chapters:

1. Metapolitical Awakening
2. Psychological Awakening
3. The Wasteland and the Grail
4. Existential Awakening
5. A Magical New World

There is a huge shift in consciousness going on now. The old world is dying in front of our eyes. However a new world is arising and there are a phenomenal number of green shoots growing for those who will look and find.

Let’s take a journey from understandable disenchantment and toxic metapolitics, through  an examination of the deepest roots and causes of this disenchantment in ourselves, in our civilisation, in our hugely increased use of technology, to a world of re-enchantment.

Don’t choose the old world, fear and control, choose the new world of love, light and healing…

Share and enjoy!

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So yet another fresh topic we haven’t covered so far 🙂 What is the role of a CLO – Chief Legal Officer – aka General Counsel in a Tech firm in general, as a superset of Fintech? Back in the day, well quite a few days ago most all companies used external lawyers almost entirely. At a certain point the concept of in-house lawyer appeared. Since then the number of laws has only mushroomed and the whole world of regulation has exploded massively. To cut a long story short there is an ever-expanding need to “square the circle” where the circle is the businesses creative desires and the square is the Lilliputians’ zillion and one Rules That Must Be Obeyed At All Times.

It is perhaps this need more than anything which has driven the evolution of the in-house lawyer into becoming a CLO/General Counsel as to get the optimal outcome someone needs to deeply understand both a specific business with its idiosyncrasies and desires as well as the law/reg thing.

So in this episode we dive into the world of a CLO with Harj who is GC at the LiiV Group and will leave you all with some feel for what type of company when should start considering creating another box on the organogram, another chair around the C-suite table.

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Ricardo is a Brazilian serial entrepreneur who joins us in this show to give us an overview of the key features of Fintech in Central/Southern (aka Latin) America. The region includes the worlds highest valued neo-bank which has reached an astonishing 65 million client base in less than a decade – most of whom never had a bank account before, so amazing things are happening down there.Which are the major players out of the nigh on three dozen countries? What are the trends. What historical and geographical features lie behind the patterns we see? How do Latin American Fintechs expand beyond their home territory?

Pismo is a Brazilian Fintech who provide core banking technology globally and who raised an impressive $108m B round last year… it only seems like yesterday that $10m was an impressive for a B.

They have offices in many countries around the world and for example power N26 neobank in Europe.

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What actually is due diligence? How does it work and how should you if you find yourselves approaching one best prepare for it? Barr Blanton CEO of Crosslake Technologies, whose strapline is “private equity and management teams trusted advisor for technology”, and half of whose business is doing due dil joins us to outline what due diligence is and how to handle it best for both buyer and seller (or in the case of VC raises when raising). Crosslake advise 500 Private Equity firms worldwide and have done an amazing 3,500 due dils in recent years so who better to ask?

Due diligence is a topic that few of you may have come across but it’s an absolutely vital one to know about – not least of which as the most common case is that VCs/PEs funding offers are always dependent on due diligence – rather like your offer to buy a house is conditional on a survey first.

There is a parallel here with another funding phase change stage that of IPOing. As we have heard in prior LFPs on How To IPO unsurprisingly the companies who get themselves in shape well ahead of deciding to IPO fare best. The same applies to due diligence yet the realpolitik is that plenty leave the shall we say “internal tidying up off the office” to roughly the day before the inspector comes round leading to a non-ideal experience.

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All sane Fintechs will have a security system to try and keep out as many attacks and fraudulent would be clients. However the nature of the attacks and frauds is getting ever-more hardcore. As Martin says in the show back in the day to rob a bank you would have to take significant personal risk when getting into and out of a bank with your shotgun and a high risk of capture by the authorities. These days the risk:return is way lower (and one reason for much higher levels of fraud) as one can sit in a warm office on the other side of the world, far from the local police force and in no physical danger). What is to be done about this massive change of dynamic?

Resistant.AI specialise in adding an additional layer(s) of protection(s) to existing systems and with an approach analogous to antivirus software – namely using AI to detect the latest patterns of attacks and updating their software hourly to keep pace.

As Martin explains there is no such thing as perfect security – however as with most of evolution perfection is not required – merely being one step ahead of the competition. If you make yourself a harder target to defraud than your competitors the fraudsters will got for them not you.

How is this done? What are the challenges? Topics discussed include:

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