Mission Zero - Global Money Movement Reimagined: Kristo Käärmann, co-Founder and CEO Wise (LON:WISE) [S10:E1]

Speaker A: Foreign

Speaker B: cowan and this is scaling up.

Speaker A: We had advice for some early investors of uh, hey, you should really have some like senior bankers on your board or in your management team. If we hire a large number of bankers, we're going to get a bank. I know the bank is not a solution. We're building something new and we'll see what it's going to look like, but we'll do it from the first Principles. This podcast aims to educate and inspire by telling the stories of great growth companies as told by their CEOs and founders. TDM is an Australian based investment firm that invests globally in fast growing public and private companies. For more insights Visit our website tdmgrowthpartners

Speaker B: um.com My guest today is Christo Carmen, the co founder and CEO of Wise, the fintech powerhouse that's fixing one of the most broken systems in the global economy. How Money Moves across borders Wise simply started as a personal workaround with Christo trying to move money between Estonia and the uk, where he soon realised that international payments weren't just slow and expensive by accident, they were structurally opaque, riddled with hidden fees, and built on systems that hadn't meaningfully changed in decades. From that experience emerged a very simple idea, and one that became Wise's mission. Money should not have borders. Unlike most mission statements though, uh, this one actually constrains how Wise operates. It shapes pricing, product design, technology, investment culture, and even how the company thinks about its bottom line, with Wise consistently using its scale not to expand margins, but to collapse prices for customers. Underneath the product though, sits something much deeper. Uh, a uh, global payments infrastructure built directly into domestic payment systems, sophisticated treasury and ledger technology, and long term relationships with regulators that have become a significant competitive advantage rather than a constraint. Today, of course, Wise moves tens of billions of pounds around the world each quarter, operates critical financial infrastructure across dozens of countries, and is increasingly becoming the underlying platform that other banks and fintechs themselves rely on. Wise is one of my favourite companies, both as a consumer in love with their product, but also as an admirer of the incredible scaling journey both Crysto and Wise have been on. I hope you enjoy this episode with Christo Karman, the co founder and CEO of Wise. Christo, welcome to Scaling Up. I'm incredibly excited to bring the Wise story to life simply because I love the business as a customer and that has set me up to get to appreciate the quality of the business that you run. Uh, I think it's probably worth setting some context up front and I'm sure the founding story will come out in more detail. But what really started as a personal workaround for you and your co founder, Tarvit. He lived in London and got paid in Euros. You worked in London but got paid in pounds and had a mortgage in Estonia and so you needed to pay that in euros. And you figured out a way to exchange money between yourselves, fee free. Tarvit put Euros in your Estonian account and you topped up his UK account at a real exchange rate. And I guess from this very simply transferwise at the time, now, Wise was born as an idea and a mission was sparked inside of you. That money should have no borders. It should be instant, convenient, transparent, and ultimately it should be free. And so more than any company I've probably come across in my time, this maniacal focus on the mission has shaped how you think about the product and the culture and the operating principles. And so maybe we start with this mission and I'm sure a lot of the conversation will flow from there. But where does, where does this mission and purpose come from? And I'm sure you'd love to give more context on the business as well.

Speaker A: Awesome. Um, fantastic to be on your show. So let me maybe even track back a little bit from the story as you told it. I have to say I wasn't smart from the outset. So, uh, before we get smart, I was pretty silly. So, uh, my first attempt really to get money back from UK to Estonia was going to a bank. And back in the day there was also some form filling and all of that, which hopefully now in most places is not an issue. But I did a transfer from my HSBC account in the UK to my account in Estonia and the money was kind of gone somewhere for a few days. Uh, but then something arrived in Estonia, but to my surprise, the amount was much smaller. So €500 went missing somewhere and I was very surprised. So I called up HSBC in the uk. Hey guys, did you make a mistake? Then I called up the Estonians. Did you make a mistake? Uh, no one, no one made a mistake. Like everything is by the book. And then I started to kind of realize that although HSBC charged me like an international transfer fee of 15 pound 20 or something like this, what they didn't tell me is that they made up an exchange rate. So rather than taking the real exchange rate that I was looking at on Bloomberg or even Googling, uh, they took that and had added another 5% on top of that. So the money that I'd been earning 5% of that was just gone in the instant of sending it across Estonia. And that, uh, was an interesting feeling because 5% is not the end of the world. It's quite a lot of money for a young, uh, 26 year old. But it was quite embarrassing. It's quite embarrassing that uh, I fell for this. And then, uh, I kind of talked to other smart people and kind of looked around and realized that that's actually how everything works. Like whenever you move money across borders, it's not just an hsbc, it's every single bank in the world, every single, um, broker or institution who was set up to do that, that is their business. And looking back, I think the crazy thing is that they, they didn't tell me they were going to charge me €500 for it. So anyways, that was kind of the preamble to uh, what you describe as the founding story, where I then started thinking about, I don't want to do this again, so, uh, what can I do? And I had indeed friends, um, in London who were doing the kind of the opposite trait. So we started a little, what was eventually a, uh, Skype chat, if you remember that. Uh, so we had a Skype chat of some Estonians in London and we were kind of figuring out how could we move money between Estonia and London without going through the banks.

Speaker B: Fascinating. And in terms of the mission itself, there must be something deeply rooted inside you. Did you feel that it was unfair or unjust or was just a problem to be solved?

Speaker A: I think it's just a problem to be. So a couple of components to that. I think generally the fact that money cross border works terribly, or at least at that time worked really terribly compared to money, um, domestically. So if you think about it from an engineer's perspective, it's nuts that money going from London to Paris is like, infinitely more expensive and slower than money going from, um, London to Aberdeen, which is much further away in a harsher climate. So this didn't really, from the engineering perspective make any sense. I think the component that is unfair or unjust is that we let banks get away without telling people what they charge. So I think generally in financial services this is what needs to be regulated, that banks should be allowed to charge whatever they like, but they should be transparent to their customers.

Speaker B: And was there anything in your upbringing growing up in Estonia that, you know, in my mind, maybe this is fanciful, but, you know, Eastern European bloc, maybe there's this lingering thought that transparency and freedom was interwoven into your value set, perhaps as a man growing up.

Speaker A: Yeah, indeed. I think if you're looking for uh, a kind of an historical connection. So both my co founder and I grew up um, just through the time as the Berlin Wall fell and we got our own country back, uh, which had nothing. So I think the interesting thing that is kind of hard to fathom is in early 90s Estonia didn't have any business. It did, it had zero banks to begin with. There was, there was even. It wasn't even such concept and all of the businesses had to be invented. So there's a generation ahead of us. So not us, but between us and our parents. Anyone who had working arms and legs will become entrepreneurs. And for sure there's an element of inspiration for us. If we do do have a better solution to this than all these huge banks do, why shouldn't we try? And uh, the whole story of then transwai started with really the hypothesis of what if this is not just an Estonians in London problem? What if it's also the Australians in London problem and maybe even French and Americans and Canadians. And then we kind of found out that it's also the Brits everywhere in the world problem. So the first years of transferwise were pretty fast expansion just because we kind of realized that it's not just us, there's a lot of other people who've kind of come up with their own little solutions here and there. Um, and this is something that if we're managed to institutionalise it might solve uh, a pretty big problem in the world.

Speaker B: I was certainly one of those Australians who worked in London for a period of time that solved the issue very much how Ewan Tarvit did it with a friend who was moving to London. I was moving back to Australia. I guess the purpose of that last question was something caught my eye in your culture handbook and that is the purpose or framing of the values is this isn't a job, it's a revolution. And it made me think that the business is just a means of doing what you've just described in line with the mission and all the standard business principles are applied but they're really re prioritised. You know, customers are first has to be at the heart of that mission and shareholders benefit along the way. And Wise has saved I think almost £2 billion in foreign exchange fees last year alone. I mean that's an astronomical number. So I guess when a leader uses the word we're a revolution, people can hear different things. M um, I'm m just curious as to what your intention was or what did you want people to hear.

Speaker A: So the Origin of those statements that we kind of formulated as uh, some of the principles. We did this about three or four years in building the team. We were I think at that time maybe 50, 100 people and got quite useful to set a kind of a clearer understanding of why we're doing this. But you shouldn't take that in this particular one. You shouldn't take it as ah, a kind of political statement or political narrative. This is more about reimagining um, how money should work, cross border from the first principles. So it's not like oh, you come in to do something that you're told to do. Your job is to figure out how that should work. So that's when you kind of think of revolutions as well. It's like, okay, the revolution or uprising is one thing but then you kind of also need to figure out how that thing works afterwards. So that's been kind of one of the guiding principles and give you some anecdotes around that. When we were growing very fast from you know, hundreds of people to kind of now thousands of people. Of course along the way, you know, we had advice for some early investors of hey, you should really have some like senior bankers on your board or in your management team kind of who know done this before. But then the alternative or the kind of the counterargument here is that in the product and the experience is the function of people. So if we hire a large number of bankers, we're going to get a bank. That's not what we started to do. Another bank is not a solution. We're building uh, something new and we'll see what it's going to look like. But we'll do it from the first principles.

Speaker B: You've certainly enacted all your operating principles from first principles. Let's touch on the product itself because it is integral to how this mission is being enacted. I know internally sometimes you talk about mission zero, which is ultimately cross currency transfers should be free. And so the product itself, it's one of the great consumer technology experiences you could ever imagine. Money moves in seconds, not days as you previously described. Fees are fully transparent, they're itemized, you always get the mid market rate. And it's got this amazing, you know, user experience that any great consumer technology should have. This shows up in many ways I think 70% of your new customers come from word of mouth which is just incredible. So uh, you know, I'm curious what product decisions I guess have served the mission in hindsight. Examples of some trade offs that you've had to make Given the practical constraints of the regulatory environment you operate, I'd just love to hear how that product in your mind comes to life to enact the mission.

Speaker A: Sure. So maybe I'll try and uh, answer almost two different threads here. One is you can refer back to mission. I want to get clear that what we're doing here, we really want to be very transparent with everyone in the company and around us. Why are we here, why are we doing this? So I think everyone joining us as well. So through the interviews it's very useful to know what's their objective, what do they want to do, what do they want to achieve. So from the very beginning if we want to solve cross border payments, it kind of sets up all the important metrics. So uh, the most important thing is how much of the cross border payments do we serve, how much we're able to save for consumers, how fast these are. So what's, so we started maybe now six, seven years ago tracking what we call the share of instant payments across the hundreds of thousands a day that uh, we put through. And it's now I think last we reported it was about 74% of all the transactions arrive in less than 20 seconds on the other side of the world. So it's an amazing journey. But the awesome thing is that these metrics are also aligned to customers. So these are the things that the uh, customers care for and then these are the things that we internally care for. And everyone's aligned, everyone's very clear on um, what we're here to do and that helps us really with the efficiency of scaling. So how do we get as many people working towards this common goal that's very obvious to everyone so that we don't get in each other's way. I think a lot of companies have missions. Some people are clear why these companies exist but it's maybe not as uh, clearly communicated as we try to do. So the why we're doing this is, is really quite important for us and then when it leads to these metrics. So what is it that is important for people, uh, when it comes to money? They want it to be there immediately. Uh, I had long conversations um, in the early days with bankers and regulators, but if it's there in the day, who wants to be faster? So now thinking back, it would be crazy to go to our customers. Hey guys, actually let's make it slower, let's make it like four hours, not 20 seconds. So uh, this is one thing, um, the cost is the other thing. So in financial services, financial services, it's effectively a commodity. Like money is fungible, this money is not better than that money. So it is a commodity that should get more and more efficient over money should get more and more efficient to use. I think that's happened over time as well. And lastly people care about convenience so they really don't want to, they don't want to think about it, they don't want to deal with their money. They want this to work. So when we look at how the product has been set up, that's all been driven by the things that we know people and small businesses value. The other realization is also why weren't banks able to do that? Or uh, why did they struggle? And our learning from that has been it's not really that the banks didn't want to have a good product, but they just never had the infrastructure to do so. And when I say infrastructure, the, the clever thing that we've done with Wise is. And as you did so the, the M money that you had in the UK was already there when your friend arrived and his money was already in Australia. So you kind of don't need to move the money. The money's already there. But and the other realization that it's very fast to move money around in Australia, it's very fast to move money around in the UK is just this uh, connection point is the issue. So we ended up building now over the years an infrastructure in WISE that connects all the domestic instant payment systems together in uh, a global mesh if you like, so that it doesn't really matter where you are in the world. If those two countries between which you want to move money have an instant payment system, you're very likely that with Wise you can use the money almost as domestically between those countries.

Speaker B: Yeah, it's worth probably picking this up just for clarity. So you're operating direct access to domestic payment rails essentially and integrating your own ledger and treasury instead of routing payments via corresponding uh, banks. Which would be the experience if I was using my normal banking service. Hopefully not in the future. And um, we'll come to the platform opportunity for you. But the decision that you made around this infrastructure has built incredible long term competitive advantage and scale and technology has built infrastructure depth and importantly regulatory trust with it. So very few people on a scaling journey build infrastructure and technology that gets stronger, not more fragile over time. I think. You know, you hear a lot of technology companies at some point in time either having to re platform or there's lots of technology risk. But in actual fact as you've got bigger Your technology and infrastructure has got stronger.

Speaker A: That's, that's true. So I think the banking, uh, generally is a very local business. So credit is a local business and tech. So if you think of the tech companies, that's a very global business.

Speaker B: It's.

Speaker A: The world doesn't need two Googles or two Amazons or two Ubers. Well, we do have some. Like China has their own Google and the rest of the world has their Google. So tech is very global. So then we end up in this interesting place where the banks are very local, the tech companies are very global. And what we're building is by nature hugely international. So we're, we're in this, uh, kind of interesting place where from the platform side, we're now giving banks this infrastructure that they will never be able to create themselves because they're local businesses, they're domestic businesses mostly. But we've created this international infrastructure that kind of links into Zengin in Japan and Pix in Brazil and NPP in Australia and so on and so on. And that didn't exist before because no bank was really set up or motivated to do that.

Speaker B: And I guess in my mind, the local infrastructure and the global technology has given you a, uh, chance to actually predict currency flows better in regards to your own liquidity. And you've been able to use machine learning around managing your ledger. And in actual fact, what this does is lower the cost and increase the speed of settlement. And so your advantage compounds over time.

Speaker A: I would have thought for sure we're very much in a scale business. So some of these effects that you describe, they are effectively coming from scale. So seeing so many different corner cases. Um, for example, now we know that, um, Reserve bank of India shares their, um, volume of rupees coming into India, which is, I think last year it was about US$100 billion worth of rupees. And then when we kind of look at our own volumes, we realize we're about 10 billion. So you kind of start realizing we move about 10% of the world's money into India now. Uh, and then obviously with that scale, we get the scale effects that none of the banks can really enjoy in that space. And then the scale effects help us, as you say, be a lot smarter in the, uh, in the way that we operate, the way that we build a product. But it's, it also brings the economies of scale so the same tech can service larger and larger and larger volumes. You're listening to Scaling up with Ed Cowan, a podcast brought to you by TDM Growth Partners. Visit the website TDM growthpartners.com

Speaker B: that's probably a good segue to a topic I definitely want to talk about. And that is how you've used scale to what is known as scale economy shared. And you've really used this as a competitive advantage. And so this is an idea simply where the company systematically passes through the benefits of its increasing economies to the customers, typically in lower prices, not always, but certainly in Wise's case to fuel long term growth and customer loyalty rather than short term profit. And this obviously becomes self enforcing. So you've chosen to use your scale economies to systematically lower price. And there are other examples of this over the years, be it Costco or Amazon. So I'd love your view on why this sometimes this theory is maybe misunderstood, but I'm sure there's been a whole heap of trade offs that you've had to make, uh, you know, pragmatically in, around trading off the short term with the long term view that this is actually the best way to, to grow a business.

Speaker A: So you're right, we definitely have the approach where uh, we recognize that as we increase the scale the product gets better for consumers. But also don't forget that every year, every quarter, we're now also able to invest more. So the scale economies are shared. Some of the benefits, um, economic benefits indeed go to the consumers who bring us that scale. So this is a very powerful thing if you're a consumer, knowing that if you bring your friends onto the platform, this is going to get better for everyone. And it does actually get better for everyone. But then on the other hand we are also able to invest more so we can bring out new features and make it convenient in new ways. Uh, we're now holding quite large chunks of customer funds, paying interest, um, kind of way beyond what banks would pay on your current account. So these are uh, kind of new things that we're now also able to do for the consumers. But it also makes it enormously more valuable for the owners of the company.

Speaker B: Without doubt. I think Wise is one of the rare companies where customers and owners as you rightfully described, not shareholders, long, uh, term owners of the business, can both enjoy the upside of that. I've actually heard you say, you know, the enterprise value of a company is merely a function of uh, the value you create for your customers. And that equation becomes clear when you think about it through that lens.

Speaker A: I think this is true not just for us, but for every meaningful company. They're creating something valuable. That's the reason why they're valuable. And some of the value we create is just making this thing cheaper for people and then in turn it is also valuable for the company, for the owners. So it's a fantastic way how clearly these things are aligned or how easily, let's say it's aligned between the owners, shareholders and uh, the customers of the company.

Speaker B: Yeah, and it's not a question of just cheap, as you said, it's better. You know, for instance, I've started using WISE as my primary bank account, given the interest benefit that you can get, as opposed to all the bells and whistles that you think you're getting with one of the domestic banks that actually never come through the system as you imagine. One quick topic I do want to talk about is I, uh, see, uh, a large and growing regulatory advantage. You know, these licenses or connections into the domestic payment systems many times around the world are hard to get and increasingly so. And yet every time you open a new market, it actually gets easier. And I know, I think Japan might have taken four years to get your approvals, but as you gain the trust of regulators around the world, it gets easier to open new markets. And so there's a compounding effect, I think, in terms of the regulatory and brand trust that you've built that also comes from the scale that you've now achieved.

Speaker A: For sure, the amazing thing is that the regulators actually all want the right thing for consumers. So they were created to avoid the financial services entrepreneurs, to take advantage of the unsuspecting public. Uh, we're kind of fundamentally very aligned with regulators. But you're right to point out that in order to operate globally in every country, we need to be able to work with a, uh, Japanese regulator as much as the Brazilian one, as much as the Canadian one or the Australian. So building up that muscle has been, has been very helpful. But over time you're also right that as our customers start increasingly place their trust in us, it's kind of fascinating to think from, um, when we made our first transaction 15 years ago to now where 13 million people in businesses are holding, uh, what is it, about 20 billion pounds of their money in wise, their trust is clearly increasing. But also the regulators seeing us that where our intents are and our actions are aligned with our intent and as we get kind of better and better, uh, over time, of course, their confidence in us grows everywhere as well.

Speaker B: So you're right in that in my mind, regulators would usually see that as systemic risk. And in actual fact it's gone the other way for wise, they've been able to build this trust in your business to ensure that growth has not been constrained by geography in many respects.

Speaker A: And I think they see that we uh, are very well set to handle the risk or provide the utility that our customers expect from us reliably. So the reliability is what they really care about here.

Speaker B: And it's not just the regulators that have seen this infrastructure and technology is reliable, it's also the banks. And I'd love to just quickly touch on the platform opportunity and for listeners, essentially the banks have worked out that your infrastructure is far better than the legacy systems that they've built on. And so they in layman's term want to white label it and use that infrastructure for their own banking experience and their own customers. And so what started as uh, B2C company, much of this next horizon could well be a B2B opportunity where you're selling your infrastructure to banks. So I'd love to hear about this evolution. Maybe the lessons that have surprised you, the muscles that you've had to build as an organization. It's a different muscle. B2C to B2B. How are you thinking about this next opportunity for Wyers?

Speaker A: Let me maybe come back to where this started. So I'll share a little story how we got inspiration for what now we call WISE platform. This story started around eight years ago I think. We launched in um, a small country called Hungary, uh, in Europe. And after a while we saw there's quite a lot of customers coming from Hungary, a little bit more than we expected. And of course I asked them so how did you hear about WISE, transfer WISE back then, etc. Etc. And then we found that some of them said well our bank recommended to use wise and we were really, really surprised as in why how then Turned out that there was a small bank, um, called axa. They're owned by the AXA Insurance Group and I can't remember what their niche is but they had one or two branches in Hungary and their bread and butter definitely was not cross border payments. However, their customers did need to make one or two occasionally. So they had this process where they had to come to the branch, fill in forms and that the teller would type into a blue screen. The money would often get missing somewhere. The customers were angry, the tellers didn't know how to help, etc, etc and they would have to charge a lot as well because obviously it's a big cost to them. So the bank managers had themselves started using wise like you and then they just uh, told the tellers the next Time someone comes in to show them, uh, how to get a Wise account, how to set up a transfer, how to fund the transfer from their AXA bank account, and probably before they leave the door, the money's already there, so it's from solved. So yes, we don't earn nothing on this, but actually our costs are so much less and we have a happy customer hopefully, uh, on the other side of it. So that was a bit of an inspiration. We didn't end up doing anything with Axabank at the time, but then we started seeing the challengers, um, kind of crop up in Europe, Europe especially we have Monzo that have been really successful N26 in Germany. And they started kind of thinking about how do we compete with these incumbents for main accounts? Because they, the, the challenge is always got like a side account almost first and then they need to be able to do everything that the big bank does. And they realized that if we're able to have Wise built into our apps, we get a better experience and cheaper pricing. So we get a lot better than our incumbents. So that became a bit of a competitive edge for the challengers that we first onboarded. And then over time, of course, larger and larger banks took interest in this infrastructure as they see their customers using Wise, but also they see their customers using Monzo and that's maybe even slightly more alerting that they don't really want to get competed away by all of these new challengers who've gotten onto this new infrastructure. So that has indeed kind of led us to the place where now we have banks, uh, almost in every country. In Australia we have UP bank or up in Bendigo, bigger names like Morgan Stanley, um, stan at Chartered UniCredit, uh, are now moving some of their flows onto Wise Platform.

Speaker B: The opportunity here is enormous. I think $120 trillion of cross currency flows every year. Have you had to think about how the business transforms itself? I've heard you say the consumer app is the best demo app of all time in regards to the opportunity ahead for the platform. And so there must be some rewiring internally as to attack this opportunity.

Speaker A: Indeed, we've set up the Org to be able to support these really large banks, ranging from doing that in Brazil and doing that in South Korea and everywhere in between. So this does take a different skill set that we've set up in the Org. But what's amazing is that both our direct to consumer apps and the Wise platform integrations, turns out the end customer still cares about the same thing. So they still care about how fast the transactions are, they care how cheap they are. So the infrastructure that's beneath both of those threads benefits both of those client groups and it just adds more leverage that we get out of every investment, every next payment system that we integrate, more scale that we bring onto the volume. There's more scale, benefits to be shared.

Speaker B: I think the ease to which the company has transferred those skills internally probably talks to the culture that you've built and how these teams have been built from a first principles approach. WISE has this deep rooted belief around democratisation, autonomy inside the business. And it's not framed as empowerment or flexibility, it's framed as what's the fastest way to get closest to the customer to make the best decision. So I'd love you to maybe go into how you've thought about scaling the culture, how you've operationalized it, because I know these small autonomous cross functional teams are really at the heart of all the developments that Wise has enabled, be it either on the consumer side or on the platform side.

Speaker A: Indeed, uh, our Chief Product Officer, Nilan Perris, uh, has this talk that has a punchline that product equals people. Uh, what he's trying to say is that the function of what you experience using the app is a function of people who are building this app. So therefore it is very important who are the people? Why are they building this app for you? And, uh, I'll bring it back to the mission a little bit. In order to be able to do all of these things that we talked about today, being able to build, uh, an experience for Australians and at the same time for Brazilians and expanding into all of these different, uh, segments that we're now serving. It becomes so much easier when everyone knows why we're doing this and then it just really becomes the execution matter of how many things we can do in parallel. The better we know where we're going, the easier it is to add another team M. As long as we have these scale, uh, effects that we can invest behind, the easier it becomes to do more and more and more and basically grow faster and faster and faster as the company. So it kind of links back to this original question you had on mission of why are we being so. Why are we talking about this so much? Because we really want everyone to be clear on what we're doing and why.

Speaker B: How have you operationalized this specifically? There are lots of operators and founders that listen to this podcast. These autonomous cross functional teams have been deliberately set up and yet as you've scaled, sometimes cultural pillars break and yet this one's got stronger and has enabled you to move quickly still at the scale that you're at.

Speaker A: So maybe I'll go back to when we started. So when we went, let's say, from 20 engineers to the 50 engineers or 100 engineers, that was maybe the point where we had to really start thinking about the structure more seriously. And I remember at that times we had to create the first of those autonomous teams. And I think the wisdom then was that we should create them for what customers want. Uh, we know that customers want speed, so we should have a team for speed. And we did. So the team was called Speed, and the other team was called Convenience. And these two teams, they had, they could do anything across our code base to make our transfers go faster. Of course, they figured out that if we do better integrations, then that's one way of doing this. If we very clever about all the internal checks that we need to do, that's the other thing. So, so they were very aligned with the rest of the organization. We just knew that we had this group of people working on Speed. If we get faster, they're doing a great job. If we're not getting faster, then we need to go and help them. And the same with Convenience, that if we see the net promoter scores going up, then they're probably doing a fantastic job. And so if we look through the history of the organization, we've tried to keep it pretty tight with what the customers want and what we're working on and this to be pretty closely aligned because then that, uh, kind of reduces the overhead of project, uh, managing or like, who does what, or who gets the resources, who gets the budget, etc. Gets very clear on, uh, what is it that we're optimizing for.

Speaker B: And in this kind of organizational structure and I guess operating rhythm, the question needs to be asked, what does great leadership look like? You know, I think I've heard you say leaders just need to hire great people, give them context and get out of the way. And in many regards that helps. But I'd be curious to hear your views on how you think about your role and your leadership team and maybe the first couple of layers of leadership in, uh, an organization that really values autonomy.

Speaker A: Coming back to this, uh, product equals people. So we have people who are building the product. So that concept, then if you think of the leadership, they're the ones who kind of build the machine that then builds the product. So it sounds a bit fluffy, but a lot of what the leaders need to do is build the most efficient, effective organization that is then able to build uh, the product without getting in each other's way. Having like really high standards, high expectations and, and being really clear where we're going. So it sounds easy. Let's give context and let people get on with um, might not be that easy always to give that context. And getting out of the way is also not always obvious when you have 6,000 people who all need to get, get out of each other's way.

Speaker B: But I also know that you love executives that have the, the domain expertise that they can in fact add value. It's not just about creating capacity for the organization. If they need to be in the weeds they can be but they can zoom in and out.

Speaker A: Indeed. So I'm happy to say that our CTO has a way around the code base and can touch any part of the code uh, if he needs to. He hasn't needed to for a long while. But if there are projects that need attention or want help then uh, all of the levels of management must be able to actually do the work.

Speaker B: I think a uh, good way to finish is m. Maybe looking forward. The future of banking and finance more broadly is definitely becoming more topical. Tarvit, your co founder wrote a blog I found in 2016 that was talking about after the financial crisis of 2008 there'd been a loss of trust and the future will be about the rise of the millennials mobile Internet regulation that actually looks after the consumer and not the banks. And all these things have come true. And so I'm interested in your view on a 10 or 15 year kind of view.

Speaker A: So there's a realization that many bankers have come to that banking is a technology business. Banks are the ideal bank is ah, a tech business or at least a very big part of a bank is a tech business. There is a relationship business element as well but a huge part of that uh, uh, a tech business. And there are going to be banks who take advantage of technology evolution and others who are going to be slower than that but everyone will. So I think I'm quite hopeful from the consumer perspective that banking just becomes a better and better commodity. We have to think about it less. It's going to be cheaper for consumers, cheaper for small businesses. It's going to get more competitive. I think that's an important one that banking gets better. When it gets more competitive that means it gets more efficient. So I think this um, definitely we're on the journey but I'm pretty optimistic to where it's heading.

Speaker B: Yeah and there's no doubt wise is now at a scale that it's going to be very hard to compete with. The more competitive it gets in the marketplace, probably the more advantageous it is for wise, given how you're placed now at a certain scale and infrastructure.

Speaker A: True. I would add to this that we've done really well, but we're still very much in the beginning, even in the consumer space. We probably serve only 5% of the market today. So there's still 95 going to banks. So our work's cut out for us.

Speaker B: You've been a long term thinker from the start. I'm sure that won't change. Good luck on your revolution to change how money is transferred around the world. Thank you so much for joining us on Scaling Up.

Speaker A: Christo, thank you so much. Thanks for having me.