Digital Human: What's the next Revolution?

Dhanum Nursigadoo

23rd March 2018 • 5min read

In this weeks’ Fintech Insider we have an interview with author, CEO, blogger, and fintech insight extraordinaire, Chris Skinner! We grabbed Chris and took him to the pub for a drink and a quick conversation on his new book Digital Human.

Listen to the interviews in full on Fintech Insider here, stream it below or read on for a few key insights.

Digitisation has been a revolution, why do you think it’s been such a momentous shift for everybody?

Technology’s moved quickly from what were once clunky mainframes to cloud-based mobile computing. Now there’s low cost access to global markets. So, overnight you can launch something through digital channels that changes the world. The Collison brothers began what is now a multi-billion dollar startup when they were teenagers with Stripe. They changed the whole way we think about online checkout. Teenagers can change the banking marketplace.

Mobile phones weren’t essential. But now everyone has a mobile phone, and you know immediately if you don’t have it on you.

You describe the human revolution as “A revolution that creates inclusion for seven and a half billion people in a connected planet” What positivity can this bring? Recording every birth on a digital ledger is going to transform developing countries where people weren’t necessarily registered at birth. 4.5 billion people who were underserved or ignored by traditional corporations in the industrial era are now included. That’ll raise them out of poverty, that’ll raise them out of disease, it’ll give them hope and opportunity. People who pay most to move money are those who have the least they didn’t have access to banks or electronic networks. Digitisation makes that possible and now there’s cheap digital access to banking products and monetary security across the world. People might be poor because of disasters or despots but they will not be poor because the system makes them poor.

Unlimited Digital Connectivity

We’ve seen mobile phone usage and smartphone capabilities radically change what it means to live in the Western world in a short space of time, where are we seeing that lead? Mobile phones, when they first arrived in the late 1970s were seen as just a thing for yuppies and showoffs, they weren’t essential. But now everyone has a mobile phone, to the point where you know immediately if you don’t have it on you. It’s an extension of you, it’s part of your body, it’s part of how you live. It connects you to the digital world. That sort of thing is what’s making us like cyborgs, downstream integrating technology into our biological capabilities and internalising technology could exist. For example, inserting microchips into children to track and trace where they are. Having an identification chip inside you so you can walk through airports without passports. It sounds ridiculous but it’s a possible future. Everything is moving towards wireless and digital. The power of smartphones is obviously putting the Internet in our pockets and purses but it’s not just the Western world, mobile phones have leapfrogged developing countries like into a new world. Look at China, $5.5 trillion transacted through mobile wallets in 2016 versus the USA transacting $111 million. You can see these are countries that leapfrogging in mobile.

Every 3 or 4 years Ant Financial is throwing away their whole architecture and regenerating. It isn’t something you hear any other company doing.

Ants Everywhere

You’ve done a case study with Ant Financial, can you tell us a little bit more about that? Ant Financial is a 30,000 word case study in the book. It’s the first english language case study on the company, there are lots of books about Alibaba, but nothing on Ant Financial specifically and Alipay. What they say is mindblowing compared to what you see in the UK in banks and even fintech startups. They’re reimagining everything. I met the Head of Systems Architecture for Ant Financial who came over from Microsoft, he’s been brought in to manage the fifth generation systems architecture. This is only a 14 year old company. So every 3 or 4 years Ant Financial is throwing away their whole architecture and regenerating, which isn’t something you hear any other company doing. They currently have 540 million users doing 125,000 transactions per second, they want to build the next generation to support 2 billion users doing 1 million transactions per second. Every transaction would be using A.I. to check for fraud, risk and analytics of their exposures. So, each transaction, often microtransactions, is being analysed with no human hand involved. Visa and Mastercard are small fry compared to what Ant’s doing.

It was all based on old technologies.

Visions of the Future

Their vision is amazing, they’re going global with partnerships across Asia, they’re the backbone behind Paytm in India. They’re also moving into Europe. Not necessarily to support Chinese tourists, which is what we thought they were doing, but to become the mobile wallet of the world. ePassi, Ant Financials Finnish partner, wanted to have Ant Financial used in Lapland for Chinese tourists. 55,000 tourists went in 2016, by 2020 8 million will go to Finland. Across all of Finland you can use mobile wallet Alipay as a Chinese tourist. I asked the CEO of ePassi, why don’t you put a Finnish, or Norwegian, or Swedish front-end on Alipay? Then they can use it anywhere. And they’re already doing that, they’re putting local front-end interfaces on Alipay. People across the Nordic countries will be using Alipay.

From Crows to Forests

In the book there are 5 key interviews; the Head of Strategy, the Head of Systems Architecture, the Head of Global Expansion, and the first coder for Alipay who wrote the first bit of code for it in 2003. The first generation of Alipay was purely an escrow service. It allowed merchants who didn’t trust consumers to deal with consumers who didn’t trust merchants. But they trusted Alibaba and it was all based on old technologies like fax machines. I was at a conference where Jack Ma was presenting on stage and he was asked how do you run AliBaba as a company. He said AliBaba isn’t a company, it’s an ecosystem of platforms and players. His role is to be a governor of that ecosystem to make sure it operates in an ethical and appropriate fashion. They’re far more ethical and focused on sustainability than any other company I’ve met on a globalised basis. They have an Ant Forest where every time you make a payment you can plant a tree.

We're going to do the same thing we do every night...

They’re not trying to take over the world, they’re trying to export their experiences and technological capabilities to local partners. Paytm is not the Alipay of India, it’s powered by the experiences of Ant Financial. The same is true of KakaoPay in South Korea or Globe Telecom in Philippines. No other company in the world had expanded on that financial inclusion strategy until Ant Financial started to do it. The fact that they started first makes it difficult for WeChat or PayPal to do it. That’s why it’s a critical case study. You’ll remember Chris from his previous books Digital Banking and ValueWeb, if you haven’t read them yet what are you doing? Buy all three off Amazon now! Listen back to the episode in full here. To ensure you never miss an episode, subscribe to Fintech Insider now! Come talk to us @11FSTeam or @FintechInsiders on Twitter or hello@11fs.com if you want to send us an email.