Navigating Global Banking Trends: A Conversation with Donat Husjainov

In this episode of the Digital Banking Podcast, host Josh DeTar sits down with Donat Husjainov, Chief Product Manager at XDataGroup, to explore the transformative power of innovation in global banking. Donat shares insights from his diverse experience, highlighting how Estonia's unique ecosystem fosters a culture of innovation and supports a thriving startup environment. He emphasizes the role of government initiatives, hackathons, and a tech-savvy population in driving Estonia's success.

The conversation also delves into the stark differences between banking markets in Europe, the U.S., and China. Donat explains how cultural and regulatory variations impact the pace of technological adoption, particularly in the rise of super apps like WeChat in Asia, which have revolutionized daily transactions.

As the discussion unfolds, Donat offers his perspective on the future of banking technology, outlining the challenges traditional banks face in keeping up with rapid fintech advancements. This episode provides valuable insights into the evolving landscape of global banking and the crucial role of innovation in shaping its future.

Transcript

Josh DeTar: [00:00:00] Welcome to another episode of the digital banking podcast. My guest today is Donat Husiaino, the chief product manager for X data group. Fun fact, Donat is actually the second guest I've had from the small country of Estonia. Also a fun fact that Donat shared with me, Estonia has the highest percentage of startups per capita in the world.

So I guess it goes without saying Estonia is bringing some pretty fascinating people to the table. And Donat is certainly one of those. Thanks. Danette has always been a problem solver, even from a young age. He got the first personal computer in his family when he was seven and he quickly learned to his dismay that the game he wanted to play on it, he couldn't, his computer just wasn't powerful enough to run it.

So rather than sulk and dismay, he set out to solve the problem on his own, tearing the whole computer apart to figure out how to make it faster and more powerful. Now, remember, this was before the days of a good old fashioned YouTube [00:01:00] video to watch on how to do it. Donat's fascination for I. T. led him in a career path, um, in I.

T., but similarly, he had a powerful interest in economy and finance, which led him to spend four years in the Asian Chinese market, researching and working there to learn how a big country With lots of people tackles banking and technology programs and how in 2014, 2015 they were able to massively grow their economy.

Coming back home to Europe, Donat worked at one of the three largest banks as a product manager and what he found was an inability to move fast and innovate due to the size and speed the bank moved at. Thanks to things like bureaucracy and regulation. Sound familiar anyone? A combination of IT and banking experience in different markets combined with a flair for design and user experience.

Donat is looking for ways to solve problems that could impact millions of people. As someone who likes to be hyper [00:02:00] connected, he also likes to take time to hyper disconnect in ways like Oh, I don't know. Climbing over 3, 500 meters in elevation in the mountains of Italy. We've got lots to cover today from banking and consumer expectations, uh, to different markets and the impact of super apps.

So without further ado, Danette, welcome to the podcast today, man. 

Donat Husjainov: Hi Josh. Thank you for awesome introduction. Um, 

Josh: so I'm, I'm super curious about this, uh, fun fact that you shared with me. I had no idea. Um, so you were talking a little bit about how Estonia has. The highest percentage of startups per capita, um, a massive laundry list of unicorns, um, and some pretty cool stuff that has come out of Estonia.

Why is that? Like, what is the culture of innovation and of cultivating startups like in Estonia? Like, what's the driving force behind that? 

Donat: Uh, it was an interesting fact because, uh, [00:03:00] it all started with the Skype, uh, which was founded in Estonia and then sold to Microsoft. Afterwards, uh, it was like first Unicorn and it appeared that Microsoft built here a, um, built a big office with lots of workers and, uh, those founders who found Skype, they understood that.

Estonia is kind of good place with the talented people in terms of the IT engineers, uh, to start up, uh, more, uh, different businesses, at least for the European market. And, uh, because of that, uh, it appeared that we have nowadays wise, which was previously transfer wise, uh, it's a big payment system in Europe.

We have bolt, uh, bolt is a big, um, ride hailing company. And, uh, we have. And, uh, lots of different other companies also like very, which is dealing with the AML and KYC list is big actually. And, um, [00:04:00] that's kind of interesting. We have lots of hackathons where people just can come with their ideas and, uh, other people can solve different kinds of cases on those hackathons.

And, uh, those are also funded by government and by Microsoft and all the big companies, uh, all over the world. So, um, we have a good engineers here and, uh, we have people who understand something in finances, uh, and, uh, it just happened that we have lots of startups because of that. 

Josh: Yeah. When you were saying to something to the effect of, um, it's really, really easy to start a company in Estonia as well, and to open a bank account.

Donat: Yeah, that's true. Um, we were one of the first, uh, let's say countries in, uh, Europe, uh, which gave a possibility to open a company online and, uh, to, let's say, have a lot of governmental things online. Like we can vote, uh, also like online. You do not need to be present even in the country. You just need your [00:05:00] ID card and access to the governmental portal.

And, uh, also we have, uh, e residency, which helps different people all over the world to, to apply for the e residency, get your ID card, uh, and, uh, then you can open a company and you can even apply for the banking account in Estonia online. So the other thing you can do online, yeah, of course, uh, I think it will happen that you need to come here maybe for some kind of, uh, Uh, KYC questions from the bank, but, uh, if we're speaking about central Europe, it will be way harder, uh, to open a company and to open a bank account than in Estonia.

And, uh, because of that, we have lots of IT companies, which started here. And, uh, uh, we have, uh, different kind of, uh, huge already startups, which are becoming a unicorns. 

Josh: In other words, I'm Super curious after this podcast, uh, [00:06:00] recording to do some research. I'm wonder if there's, um, some case studies just talking about, you know, kind of how, if, if you literally as a country cultivate innovation, like what kind of impact that has, um, I'm sure it's quantifiable, right?

I mean, I'm sure it has had an impact to Estonia's GDP and to, um, you know, just the, the quality of life, uh, in the country, like I'm sure there's massive ripple effects to it. But I'm curious what the downsides are, right? Why are maybe other countries not so willing to, to make it so easy to create startups and to innovate?

So, I don't know, um, now you've, you've opened up a whole new world of curiosity to me. Um, 

Donat: Actually, I was also thinking about that. And, uh, the answer here is very easy. Uh, Estonia is a small country, uh, on the post Soviet, uh, uh, territory. And, um, we have, we don't have so much resources, uh, in our earth. [00:07:00] So, um, We have people, and we have our minds, and, uh, we need to bring something to this, uh, world.

Yeah. That's why, uh, people are studying at the universities and different kind of engineering programs, uh, in scope of the IT and also in finances. And, uh, that's why we have lots of engineers who are working. Lots of them are working remotely. Uh, you are living here, but for example, working for some kind of a central European company or for the U.

S. even company. Hmm. Yeah, living quality of living here is kind of nice. Uh, we have, um, let's say good people here. We have, um, a lot of, um, free place to build your own house if you want. And, uh, a lot of people, uh, want to be even more in the IT sphere and, uh, e commerce is developed well. So, um, It's very, um, Let's say if we [00:08:00] compare Estonia to other central European countries, for example, let's compare two capitals like Tallinn and Berlin.

Berlin is bigger, lots of people, and it's way harder to buy their flat for, uh, let's say junior engineers. And if we compare to Tallinn, in Tallinn junior engineer can buy it and it's more affordable. And, uh, quality of living, as I said already, is higher there and, uh, we can easily, let's say, give a possibility to our children, uh, walk on the streets and, uh, do what they want.

And, uh, uh, we do not think that something will happen to them because like the criminal rate is very low here. So, nice place for the family. 

Josh: I hate to put you on the spot if you don't know the answer off the top of your head, but what's the population of Estonia? Do you know? 

Donat: 1. 3 million, one, something like 1.

3, 1. 5. But, 

Josh: um, I'm curious. I'm going to Google [00:09:00] real quick. Um, yeah, so I live in Portland, Oregon, which is just a city in one state in the country. And, um, if you, If you don't even include all of the major surrounding greater metropolitan area, it's 635, 000 people. So we're like half of Estonia, just in Portland.

Um, so I think the scale definitely changes things, which, so that kind of brings me to one of the big things that I really wanted to talk to you about, right? Which is, um, I, I thought it was fascinating. The very first time that, uh, that you and I talked, you made a comment that has kind of stuck with me.

And you were talking about how the European banking market. Um, is behind and I kind of had to chuckle because I think a lot of times when you talk to folks in the U. S. market, we think we're behind compared to Europe, right? And so it got me thinking about, um, like it all depends on, um, what the [00:10:00] measuring stick is, right?

Everything is, um, has got kind of levels and layers to this whole thing and it depends on how you're measuring it. It's like, I'm really, really tall. Um, if you measure me against fifth graders, right, I'm really short if you measure me against, uh, you know, professional basketball players. So it depends on the scale that we're using here.

Um, and so, you know, kind of having that, that scale, um, it changes the perception. And so, you know, when you talk about how the European market thinks it's behind, behind. Why do you think that, like, what are you measuring the European market against? And what areas do you feel the European banking sector is behind in?

Donat: Oh, that's a very big topic and, uh, interesting one because, uh, it happened to have experience in, uh, living in China and, uh, as far as I was starting [00:11:00] and, uh, a bit working there. And, uh, for four years. So, uh, when I came there in the year 2000, uh, 15. Uh, I saw that, uh, banking there, uh, it's something interesting.

It's something different from the Europe. And I was curious, like, what's the difference? Cause like, okay, same app, you can make payments, but then you see that you can also like rent a flat from the app of the bank, or you can buy a ticket for the train, or you can buy a ticket for the plane, or you can buy an insurance, or for example, you can order food.

And all of those, uh, are built from the microservices and, uh, this app is called a super app. And if we are comparing, for example, U. S. market to the European market, in the Europe, we have lots of different kind of, uh, already big neobanks as N26 or Revolut. Uh, which are, uh, [00:12:00] providing a cool user experience, different kind of products, uh, Revolut even have a cryptocurrency exchange on their own.

So that's cool. And, um, I would say that in terms of bureaucracy, Revolut is way easier comparing to some kind of central European bank. If we compare Europe then to the U. S., I know that in the U. S. you have even more bureaucracy. Uh, it's, uh, harder to open a bank account. And, uh, in terms of the user experience, uh, you're, like, now we're, like, Two, two years already, like catching a revolute and trying to make something better because you also have different kinds of cool startups.

But if we compare us market and the European market to Asia, then I can. Easily say that we are at least like, uh, um, in five years on lay, uh, on the Asian market in terms of the user experience and, uh, amount of products which we provide in the [00:13:00] banking sphere is building a super app. It's kind of hard.

You not only need a good platform, you need lots of engineers. You need lots of partners and partnerships, and the good SDK, which you can provide, uh, to all your partners and who can, who is able, and who want to make microservices inside of your super app. So, uh, of course for China, it's, it's a bit, uh, easier because, uh, they have kind of, uh, let's say monopoly there.

Uh, it just happened that, uh, uh, WeChat appeared and, uh, WeChat. Added and Wicha pay, uh, sen. And uh, they started adding different kind of services, uh, there and after that also they have a Alipay. So that's a huge two, uh, companies which are providing different kind of payment solutions and, uh, payment products and, uh, building a super apps and, uh.

For Chinese market to [00:14:00] build like a third or fourth, uh, such kind of big super up. It's kind of hard already nowadays because, uh, you have already two huge competitors, like how to compete. Uh, but for Europe and for the U S we still have this possibility, uh, to see like who will be the first one who will combine, let's say, uh, Uber, uh, with the, uh, some kind of banking app and, uh, with some kind of insurance company and, uh, some kind of, let's say, uh, flight, uh, buying company, tickets buying company.

So, uh, let's see how it will go. 

Josh: Well, I think one of the things that plays into this too, right. It's kind of what we were even talking about at the beginning of this, about just the culture of Estonia, right. As you look at the, um, the culture of say the U S market, the European market and the Chinese market.

And they're very, very different from the cultures to, um, you know, just the makeup of the [00:15:00] people that reside there to the governments and the government structure. Um, and I think, you know, an example. That the U. S. definitely looks at, and we've definitely been behind in is setting standards for, um, you know, different types of, um, try not to over generalize this, but try not to just pig it onto one specific thing, too.

But I mean, the example is, you know, just having a standard A. P. I. That's used for banking, right? And in China it's basically dictated. They're like, this is what you will use. So it does a really great job of creating that standard, right? Because you have to use the standard. Um, you know, I kind of always use the joke that like if everybody has a standard, then there is no standard, right?

If you have your standard and I have my standard and my wife has her standard and you know, your dog walker has their standard. Like none of us has a standard. We all have our thing, right? We're all unique. And so it's very, very [00:16:00] difficult to then get our standards to all talk to each other. And so when you look at kind of how the Chinese market has approached having a standard versus how the European market did versus how the U.

S. is navigating that, I think that also poses, you know, differences in what you will see the outcomes be. Don't you think? 

Donat: Um, you're right, actually, because, uh, coming to one standard is very hard. And, uh, We can even say if we compare US market and the European market that We have different countries inside of the Europe, like European Union, but you, for example, you have different states inside of the United States.

And as far as I know, even in different states you have different kind of legislation and understanding on how to provide and make different kind of bureaucratic decisions. Same for us. Of course, we have some kind of regulations from the European Union and European Central Bank. But [00:17:00] in addition, each European country central bank can give also some kind of additional requests to the local banks.

So, uh, but, uh, what we are coming to, uh, I know that, uh, in Europe, uh, um, We are building, uh, let's say one standard, uh, for the all European countries in terms of how to interconnect, uh, for example, open banking system, how to interconnect different kinds of banks inside of the European, uh, union. And that will help, for example, if you have a Estonian bank, uh, through the open banking to connect your, uh, let's say bank from Finland or bank from Latvia.

Uh, bank account, I mean, uh, to your Estonian bank. And when we will come to this, uh, then, uh, I think that it will be a huge step into the future in terms of the banking, because, uh, I [00:18:00] think that some company will appear who will just provide a good user experience to connect different kinds of banking accounts inside of their app.

So, and then you will be able to use your money from different bank accounts inside of this app. Uh, so it will be already, you know, like layer one and layer two. So banks will, uh, work in their business. Uh, they will provide loans. They will, uh, take your deposits. They will work with the transactions and, uh, this, uh, layer one already, uh, app, they will just show it in a good way with the nice UI, with a good user experience.

I think this thing will. Could happen at least, but we'll see. 

Josh: Yeah. So I want to kind of dive deeper into what some of your thoughts and predictions are on. What's going to happen to kind of traditional banking in markets like Europe and the U. S. As some of this technology starts to unfold [00:19:00] and, um, and, you know, to kind of consumer expectations start to change.

Um, but I want to go back to, because I think to your point, right, in terms of just the ubiquitousness of use of things like super apps and the ability to kind of seamlessly digitally transact. China is far, far ahead of the rest of us. Right. So maybe talk us through a little bit of that example. Um, like we have no idea, you know, how did China go from being a predominantly cash driven economy to cashless almost seamlessly overnight?

Right. Maybe talk us through a little bit of that. What does it look like? Um, and then how does it, how does it just kind of function for, you know, the everyday person in China today? 

Donat: They made a huge step actually. I remember, uh, when I came there in the year 2015, uh, when you want to buy some kind of like, let's say street food or you want to buy some [00:20:00] grocery, you can still like use some kind of cash.

But already after two years in the 2017, even like some kind of street food and, uh, small shops, all of them were using a QR code. Uh, so you just needed your phone, uh, with the camera. Uh, you scan this QR code and, uh, pay with your, uh, WeChat pay or, uh, Alipay. And, uh, that was, uh, like huge step in two years or even faster, uh, maybe in the 2016, they even started that.

And, uh, why it was also interesting for me, cause, uh, you get there, you don't load a WeChat app, which is a messenger. So, uh, you want to add, there's some kind of like friends with whom you got connected there. Uh, and then you understand that you can not only chat with them, but you can also send the money in chat and that's in the year 2015.

[00:21:00] Uh, so, okay. Nowadays, if you check a Revolut, for example, yes, they also have chat and you can also send money through this chat, but we are in the year 2024. So, um, uh, Uh, that was, uh, that was a cool thing in terms of how to connect the chat and messenger, uh, with the banking. And, uh, afterwards they just started to building different kind of microservices, uh, on the basis of the chat and then the basis of the, uh, banking.

So those microservices were built by different companies, even like McDonald's. They had even, uh, their own small microservice, which was also connected to all this system. So from the, we chat you. Um, just open this McDonald's app and you can see that your orders, you can order something from there. You can, uh, uh, pay, uh, like you click on the button, pay, and, uh, they're, uh, withdrawing your money from the bank account, which is connected with your [00:22:00] WeChat.

And, uh, you do not need to use any kind of, uh, Apple pay or Google pay or whatever, everything through the messenger. So, yeah, that was, uh, that was very interesting, 

Josh: you know, so I was just, uh, I Googled quick while you were talking. So Apple pay via text released essentially 2018. All right. So a good solid three, four years after it was pretty much ubiquitous in China.

Um, so what happened on that to the traditional banking? in China when this became the predominant way of doing transactions because you kind of talked about, um, you know, it's not just about like logging in and checking my bank account balance and doing a transfer. It's all the things that my money and my finances are associated with.

So as we went from a fairly, you know, traditional cash [00:23:00] based economy With a, I actually don't know, you know, previous Chinese banking very well. So you'll have to keep me honest here, but right, like a more traditional banking ecosystem, like we think of it to all of a sudden, people just have these super apps that do everything.

Like what did that do to the traditional banking in China? What happened to things like, um, cash checks, cards, like all the things that we associate with traditional banking. What happened to those things? 

Donat: You know, Josh, the interesting thing here is that, um, Um, nothing happened. I mean, like they have changed the banks in China have changed.

They understood that, uh, there is such kind of applications, uh, which are using, uh, bank cards of those, uh, classic banks and, uh, what they have started to do in China, this classic banks, they just made a flow of registration inside of the bank and ordering a bank card and opening a bank account easier.[00:24:00] 

So, uh, I don't need to spend nowadays, uh, lots of time for that. Uh, registration process is, uh, very fast. You're getting your bank account, you're getting your card. Afterwards, you add this card to your WeChat pay or Alipay and, uh, You're cool. Uh, that's, that's something common with what I was saying that layer one and layer two, uh, financial applications.

So, uh, banks are nowadays more in China as layer two, where they provide a. where they, they have banking licenses. They have a possibility to store money. They have a possibility to deposit your money. Uh, you can make their savings, you can take loans from them, but all the fancy stuff, all the e commerce, all the.

Uh, let's say, uh, microservice things are already going through the later one. And those are which and Alipay apps, which have a fancier user interface, fancier [00:25:00] user experience, and, uh, are more commonly used, uh, all over China. Cause like you're using messenger every day. Not all the people are using their bank accounts every day, but if you're using your messenger every day, then why you cannot like add their bank account and check up your, uh, balances.

So that's the logic. 

Josh: So, um, I'm so super curious that, um, pardon the ignorant question here, but so in an economy, so do people in China still use cards at all? Like when I go to a store and without a physical like debit or credit card. 

Donat: I mean, yeah, you can go to the store with your physical bank card or even with the cash and, uh, they will accept it and everything's fine.

Uh, but, uh, WeChat pay and Alipay are more commonly used because it's way easier to scan a QR code and pay with your phone because you're taking your phone where, like wherever, everywhere with [00:26:00] yourself. Um, but from time to time you can forget your card somewhere at home or in the car room. So, because we are, uh, one more comment here, NFC technology, uh, was not so commonly used, uh, in China.

So they were using QR codes and they are using QR codes. And, uh, that is a big game changer because, um, Um, on every phone, it doesn't matter. Is that Android or iPhone, uh, you can just scan and pay and you don't need any kind of additional applications as Google pay or Apple pay. That's the story. I 

Josh: remember, um, my wife used to have, um, some work trips to China.

Um, and I want to say the last one she went on was probably like late 2018, maybe 2019. And, um, and I remember her saying like she had to, [00:27:00] she had to make sure that she had WeChat and had money loaded into there. Um, because her corporate card essentially didn't work anywhere over there. Um, and it wasn't even like they could get cash because 98 percent of the places that they went wouldn't even accept the cash.

They were like, nope, scan the QR code. That is how you pay us. Um, I remember her saying the first time she went over, like that was a huge shock to her. And she was like, I'm really, really thankful that I went with, you know, uh, a group of folks that had been over multiple times before and kind of knew the ropes for that.

Um, but you know, it's just interesting as I think about, is you start to get to a place where, you know, all of this trans acts directly like pay by bank, right? All I have to do is scan the QR code and say, you know, I'm authorizing, um, a push payment from my bank account. to this merchant to pay for the product that I just purchased.

What's the point of [00:28:00] the card in that, right? What's the point of issuing a card and having plastic if you get to that level? And it looks like China is getting really, really close to that level where I don't know, maybe I'm crazy, but kind of sounds like there's no point to a card, a cash, a check, any of that.

Um, which if I think about from the U S market is really fascinating because You know, we talk about how we still have checks. I can still pay someone with a check. It is the silliest technology. Like it's not even technology, right? Like it is the silliest thing ever that I can and still do pay people with a check.

Right. But really the only reason that checks still exist is because we let people use them. Right. And we haven't necessarily given people a more ubiquitous tool to use. That works as well to accomplish the same thing, right? If you think about, okay, what if I don't have a smartphone? Granted, I'd be curious to see what the [00:29:00] statistic is here in the U S anymore of how many people don't.

I mean, I bet it's, it's getting pretty crazy low. Um, but let's say I don't have a smartphone, right? So how do I make a payment? And so maybe a check needs to be accepted in that sense. But I think there's also a part of it of just going back to the culture side of things like. Uh, I think Americans really want their cake and eat it too, right?

And it's like, no, no, you let me pay with checks before. So I may only do that once every 16 years. But when I do, you better keep that from me because I better still have that. You know what I mean? Um, and so there's almost a fear from traditional institutions and everything like, Oh, we can't take checks away from people to be so mad.

Um, you know, I'm curious what happened in China when you started to cross that line where, you know, like what my wife experienced, like, no, sorry, we don't accept cash. We don't accept cards. We don't accept checks. We don't, you will scan our QR code and you will pay. Right. When they crossed over to that, I wonder how many people were like, [00:30:00] ah, I hate this.

This is stupid. And then how long it took before they were over it. And we're like, fine, this is just how we operate now. And it just is what it is. 

Donat: You know, it, it's a bit working in another way in China. Cause like, uh, during those time when, uh, China was producing, uh, lots of different kinds of new phones.

And, uh, of course, Android phones, um, cause like, uh, um, That was a growing, uh, economy, like rapidly growing, of course, they're still growing, but it was rapidly growing during this time, every person had already at least an Android phone there. And, uh, All the technologists which came there, they were learning it and they started using it.

That's a, uh, cultural Chinese thing that they're watching how everything is working all over the world. Uh, they can copy it, but not just copy it. They're implementing it in a way that it's better to use. It has better design for themselves. It [00:31:00] has like better experience. And, uh, that's why they're producing lots of.

Things which we are nowadays using. 

Josh: You know, that's, that's another thing that, um, you had kind of had talked about the last time you and I talked was, um, the user experience side of things, right? And how each of these different markets and cultures have different expectations for what good user experiences, right?

And if you took the best user experience in China and gave it to Europeans, they'd be like, this sucks. And if you took the best of European user experience and took it to the Chinese market, they'd be like, this sucks. Right. That's true. Yeah. And so, especially thinking about the Chinese market, right? I mean, you're talking about, um, you know, one of the largest populations in the world.

How do you make a user experience that the, you know, prevailing amount of people Align to and say this is good user experience, especially when you're talking about they may [00:32:00] be able to function 80 plus percent of their lives and probably high 90 percentile of their financial lives from one of two apps.

Like that's mind blowing to us here in the U. S. Right. I mean, we get upset when Gmail just changes like the color of one button from blue to light blue. Right. So, so how does that look in, uh, in the kind of Asian markets? 

Donat: Um, so Asian market, as I told already, they're quick changers. So if you're providing them something new, something, uh, well designed for their market, of course, uh, then they will not, uh, start changing.

Saying anything about it, that just learn it and start using it. And that's very interesting. Uh, they're, they are all, uh, time like, uh, learners and that that's their cultural thing. And if we're speaking about, uh, for example, same design thing, uh, [00:33:00] yeah, like, uh, user experience and user interfaces are way different.

We can compare, let's say European and the U S market, and we can make We can make an application which will be used on both markets and both markets will like it, uh, adding some, uh, small user experience things, which are, um, let's say specific for the markets in terms of like payments or whatever. But if we compare those two markets with the Asian markets, that's.

It's a totally different thing, for example, if you are getting to some, uh, web page or application page and there is, uh, no, like, uh, different kinds of hundreds of buttons and different kinds of texts with the information, then, uh, Chechenese people will not like it because, uh, what do they like? They like when, uh, you have one screen and lots of text.

Important information is already on this one screen. They don't like, uh, a lot of clickings, uh, [00:34:00] inside of the application and inside of the web. So as much of information as you can put inside of the one screen, put it inside and everything will like it. Uh, if we compare to the European and the U S market, then no, you need a small design, you need like to have a separated buttons, you need that you're, uh, Text is aligned with the left side or with the right side or centered or whatever.

You cannot put like several sentences, uh, on one half of the screen, you should put like a hyper linkage where you click and then you read some terms and conditions, because if you will put all of this inside of the one page, uh, the majority of people will not start using it and will not like it on our markets.

Uh, but for Chinese market, if you open, for example, some kind of the newspaper website, uh, that's a very strange thing for us. Uh, cause you will see lots of different kinds of pictures, lots of text. Uh, everything, uh, is [00:35:00] written in Chinese and, uh, you can only like you, you can spend lots of hours just on reading what is on one page.

And, uh, if you click inside, then you will see also like a huge text. Uh, but, uh, if we compare with our user experience in Europe and the US, then we're trying to make it more native in terms of. We are not trying to write everything. We are trying to provide people their own understanding of what they see on the screen.

Let's say it in such a way, because like when you open some kind of application and you already see that there is some kind of icon and out in their icon, it's written some balance. Then you don't need to write the word balance. You already understand. Okay. I have like 10, 000 on this account and, uh, which is under written under icon.

So I understand it. If we're speaking about the Chinese market, you should write more. Uh, they prefer when a lot of things are described and, uh, written with the text. That's a [00:36:00] difference. 

Josh: That's interesting. And especially when you're talking about, so thinking about like the WeChat app, um, I almost feel like if you took something like that to a U S market, for example, right?

Um, you're going to start to see people get stressed out. You're going to start to see, um, You know, people having anxiety around the interaction with that because there's so many things to do so much text. Um, so what do you think of kind of the super app in a European or us market? Does that based on just our cultural expectations of user experience, do you think that's ever even going to be a thing?

Donat: I think that super apps will come and if we're speaking, for example, about the U. S. market, then such big companies as Apple and Facebook like Meta, they will come with some solution. They're [00:37:00] already like building an ecosystem between their products. And, uh, They just need to sum up all the products inside of the one app, uh, and, uh, make it with a good user experience and good user design.

I know that that's hard. I know that, for example, if we're speaking about the Amazon or eBay, it's even hard for them to change one button on their interface. Facebook is like, they have hundreds of metrics about how frequently people click on this side of the button or another side of the button. And if you will change, uh, location of this button and for example, your sales will decrease than a product manager who have made this decision, uh, you will got fired.

And uh, because of that, like, uh, Managers in, uh, states, uh, and in Europe, uh, they're a bit afraid about making a huge changes. But, uh, I think that it's coming with the different generations, uh, [00:38:00] then, uh, when Let's say younger generation, which is currently using different kind of, uh, modern fintech apps. Uh, they have, like, for example, in Europe, they can have already some kind of Revolut, uh, plus, uh, I don't know, they like using Instagram, uh, stories, uh, YouTube previews and, uh, Tik Toks, and, uh, also playing some, let's say Roblox, they have already a huge, another user experience comparing to even me and you have nowadays.

And, uh, that's very important for the product managers and of course, chief product managers to understand where the market is going to make this apps and super apps, uh, Already acceptable for, uh, different generations. You cannot make it too fancy, uh, on the level of the tick talk, but at the same time, you cannot make it, uh, let's say in a way how banks are building it.

So you need to make something between, then you will [00:39:00] be able to work with the different audience. And, uh, I think like my answer on your question is, will we have the super apps and, um, Um, I think, yes, we will have them. Uh, the only question here is how they will work and how this microservice and the linkage between different apps will work in our world, let's say.

Josh: Um, yeah, that's a good point. You bring up to that in that, um, especially. As we add like the, the generational element and especially looking at the current generations that are alive today, right? Because there's, there's one major moment in time that exists in kind of the current generations that are alive today that is very different than any other moment in time.

And that's, you know, the advent of the internet. All right. And so we have people alive today that, you know, grew up with [00:40:00] zero internet. And people alive today that grew up with a hundred percent of their life with the internet. Right. And then people with the in between. And so, um, as you start to think about that, that there's different expectations even within those groups.

And I will argue that, you know, if you do a great job of user experience, um, it's not like you need something, you know, truly tailored to somebody that's 90 and somebody that's 10 and somebody that's Right. I mean, my three year old barely gets to use any, um, technology, um, you know, right, wrong, or indifferent.

We've just decided to be those parents. Like he doesn't have an iPad or any of that stuff. And literally just the other day to now I was, um, I let him watch some video that we took on my laptop and it took him literally never touching a laptop in his life. Took him all of about 10 seconds to understand how to use.[00:41:00] 

the track pad for my apple. Um, and click play on the video. I mean just figured it out, right? So I argue that, you know, he could figure that out. So could, you know, my grandma. So there are certain things that are just going to span generations, but at the same time there is a change in kind of how people are leveraging technology from the younger demographics and what some of their expectations are.

And you know, before we started recording, you like literally 10 seconds before we started recording, Danette drops this on me. I was like, Oh yeah, that's great. Let's talk about that. Um, of just the, uh, you know, if you're a product manager, um, at a financial institution and you're not on Tik and Facebook and all of these different social media platforms, you're not doing your job.

Um, you really need to be understanding, okay, what are the things [00:42:00] that people are using that are influencing their expectations? Because let's be honest. Um, right. Whether you like it or not, whether the government wants to ban it or not, it doesn't matter. Kids are on Tik TOK, right? And so if you don't understand what Tik TOK is teaching our kids about how to navigate around, Then you're missing a major piece of the puzzle because they are using TikTok way more than they're using your banking app, right?

Exactly. Yeah. And so for us to think that we're going to influence their user experience expectations of TikTok because of our banking app, like we're crazy, it's going to be the other way around, right? So you've got to understand if you want to try to attract younger demographics, You do have to at least understand, okay, maybe I'm not building a dedicated banking app for them, but how do I take my banking app and, you know, [00:43:00] understand the concepts of user experience and how people navigate around and what the culture of, you know, technology utilization is and apply that to your solution, then yeah, you're going to miss the mark.

Donat: Yeah, I fully agree with that. That's exactly what I was speaking about. Cause, uh, from time to time I meet such kind of product managers who have like a good experience in terms of, uh, competitor analysis of the banks in the central Europe or let's say in the States, but they have no idea, uh, How stories and Instagram work.

And afterwards I ask them, okay, but how you want to interact with your, let's say users inside of your banking app in terms of some kind of advertisement of your banking products. And the answer is like, Oh, we can add a banner. Uh, or we can, uh, add some kind of like advertisement inside of like, let's say accounts or like in some somewhere in the menu, and then I'm just getting shocked because I understand, [00:44:00] okay, those people are building a applications where I see banners, which I hate.

It's like, frankly speaking, nowadays you have lots of other possibilities on how to sell and how to advertise products inside of your app. You can just, for example, if you want to make some kind of, uh, Advertisement. And for example, to provide some news, you can just add some kind of stories inside the overall application.

And first of all, you're providing to your clients, some useful information in terms of the finances, let's say how to save money, uh, your. Uh, educating them and on the second part, your second story could be like, uh, we can save your money with, uh, such a fee and such percentage, and, uh, you can apply for that.

And, uh, that's already native. You don't have any kind of banner. You have just a good advertisement inside of stories, which people like. So that's the case study, which some product managers need [00:45:00] to do and to implement, I think. Yeah. 

Josh: Um, you know, that, that leads to another point of, um, you know, just thinking about maybe it's not even, you know, going straight to super app, but what are the things that align to what people are looking for that?

Could and should be a part of the experience they gain from you. And I wholeheartedly agree. I think, you know, financial literacy, education and tools is a really missed opportunity, especially here in the U S um, which I find kind of funny. And I only say funny because I don't want to say depressing because that's what I really want to say.

Um, Because that's such a missed opportunity on both sides of the coin, right? One, if we're making people more, you know, financially sound, successful, healthy, that's great. Like that's, that's a really big value add that we have [00:46:00] brought to those people's lives. But at the same time, if I make them that rich, Deposits, his accounts, his things are going to be with me and my deposits go up and It's a win win, 

Donat: right?

Yeah, that's the point and How I see that like we are Living in such kind of era where we have lots of different kinds of apps. We have different kinds of fintechs. We have different kinds of nail banks. We can download those apps. We can install them quickly, registrate and deposit some amount from your bank account to those apps.

And with the same speed, we can withdraw this money from this app to another application. So how to catch. Uh, your customers inside of your app, you should provide them some additional value. You cannot just like make good payments or put a zero fee or whatever, like others are also doing that. You should catch them somehow.

And I think that, uh, [00:47:00] financial education inside of the application, uh, is a good point, how you can catch them and how you can work with your clients. For example, uh, you see that, uh, you have, let's say people with some kind of, uh, good, um, savings accounts, but, uh, they are not investing those money. So you can provide them some information and not the text one that, uh, they Uh, invest your money and, uh, earn such kind of like percentage on your, uh, let's say investment.

No, it should be somehow introduced in the scope of, uh, let's say a short story that, uh, some, uh, let's say young guy who was investing money, uh, during his three years can right now go like somewhere to, uh, travel or to climb or whatever. And, uh, in this scope, you can provide some, uh, People's story, first of all, and on the other hand to provide some, uh, let's say options on what people can do with their money [00:48:00] and the beat teach them on where to invest, how to do that through which platform inside of your application and, uh, which can they, what they can gain in returns.

So if you will be able to do that, uh, they will start investing money. And when the person already invested some money inside of your platform, then. It's way harder to, for this person to switch an application, then this person needs to sell their invested money, like sell their, uh, let's say stocks, get money back, then we draw them.

And there is already a lot of steps to do that. But if you're just like holding your money in the balance of the application, then that's very easy. You can withdraw it to another application and delete the previous one. And that's it. 

Josh: Yeah, being able to move money around different applications, uh, is I think a big part of that too.

Right. And I think that's one of the reasons why. Um, I don't know, in [00:49:00] some regards, I think maybe that whole, the super app, um, methodology seems to make a lot of sense is, yeah, I mean, think about it in your own personal life, right? Like money is money. It just, I need to transact it to do a bunch of different things and it kind of almost artificially lives in all these different silos.

Um, and sometimes can be very hard to move around those silos. And as those walls start to get broken down, um, that's going to change the landscape significantly. And, you know, you've kind of talked about some of the examples of some of the fintechs and the neobanks. Um, obviously, you know, they're coming in And a lot of times they're focused on a very specific niche, right?

Whether it's a certain type of product that they offer, a certain type of market that they go after, right? They focus very, very heavily on customer acquisition, customer onboarding, right? And then user experience. And so. They do those things very, [00:50:00] very well. They come in very heavily funded and a lot of times they come in from a different avenue than traditional banking.

So some of the barriers that traditional banking face in things like regulation, compliance don't necessarily apply. Let's park that to the side because I think that's also probably going to start to change, right? Like as these people start to do more traditional banking things, What they are going to find is they're going to need a traditional banking license and Oh, snap.

Now, all of a sudden you've got the same regulation slowing you down. That is the banks and you lose some of that competitive edge, but that's neither here nor there. But, um, you know, you were kind of talking about how they're able to scale really quickly, they're able to provide really amazing user experiences, and they're able to capture market share away from the traditional financial institutions, and then you look at some of the like European models in like N 26 and rebel loot, um, what has made them so successful?

Donat: Uh, I think that, uh, Those companies, when they [00:51:00] started, uh, they had a motto that there is nothing what can stop us. And there is nothing which can stop us from building a good products, even like, uh, law or different kind of, uh, jurisdictional questions because, um, uh, if we're speaking about the Revolut, for example, they started with the payment license as far as revenue is concerned.

I remember and, uh, right now they have already a banking licenses, uh, in some countries. So, uh, they're going also and growing rapidly. And, uh, what they do not like when some compliance people are saying that we cannot do that. Cause, uh, what I'm also like doing in my life, there is nothing that we cannot do.

The only question is how to do that in a way that product is good. User experience is good. User interface is good. And at the same time, everything is like, um, up to law and up to date in terms of, uh, let's say I'm some, uh, bureaucracy [00:52:00] things. And, uh, if we're speaking about banking, we can do that. Another question is, Do the people who are working in some departments really want to work and really want to invest their time into understanding on how the competitors are doing the same business in the same field with the same products, but way better than some kind of usual classical bank.

And no offense to the banks, I can understand that they're huge. They have lots of people working there and, uh, people are from, uh, different generation with different education and with different, uh, let's say experience because maybe they have tried, let's say five or ten times. Six years ago already to, uh, develop some good product.

And during those time, um, the law was another, and you was not able to bring them to the world, but maybe something has changed a year ago. Um, but you still think that. nothing has changed. So you need [00:53:00] always, uh, you need to be up to date, uh, all the time, because if you miss something, then competitor will just, uh, uh, use this possibility and build product faster than you have built it.

So it's all about, uh, current, let's say, um, way of, uh, working on the way of, uh, learning that even if you're, it doesn't matter where you work, you can Uh, if you work in the IT or in the finances, you should know, like, what is the latest, uh, let's say technologies. What are the latest, uh, possibilities for different products and what are the latest cool applications, which, uh, are used by different people all over the world, even if it's not a banking application, you should know about all those things, and then you will be able to build a good products.

That's my point of view. Um, 

Josh: you know, as, as people kind of start to think about what happens [00:54:00] as some of these different barriers get broken down that we were kind of just talking about, um, what do you think some of the potential end state is for the, the ways in which traditional financial institutions.

Can and maybe have to be able to innovate and I'll give you an example that you may or may not be aware of But you think about like a very specific product that's fundamental to a traditional financial Institutions ability to do digital services here in the US is digital banking, right? But for them digital banking is such a big part of their institution, right?

It is, for lack of a better word, I mean, it is the face of their brand anymore. Um, because more people interact with that than their traditional branches, their call centers, and everything else combined. So it's really important. So they're not going to [00:55:00] just, and the vast majority of community financial institutions are never going to build this themselves internally.

Right? So they're going to have to partner with somebody for that. So because that partnership is so incredibly important, this is not something they're just going to decide. Like they're all going to be sitting around the dinner table and be like, you know what? We should change digital banking and we should go with these guys.

Let's go ahead and, you know, let's get that project going. This is going to be, you know, we find on average about a year long project for them just to identify who they're going to have as a partner. And then because of the complexities of legacy technology, the complexity of just the product, right?

Because there's so many different things that go into it from decisions you have to make about UI to branding, to integrations, feature functionalities. To all the compliance and regulation that we talked about, you name it. Like the list goes on and on and on. It takes them about another year just to implement it.

Right? So from the point where you're like, we should change digital [00:56:00] banking to the moment it's live is probably two years. Right? And then you just went through this massive project. It took you forever to decide. It took you forever to implement. Let's say day one, you're like, Oh, you know what? This thing kind of sucks.

We want a different one. Right. You're another two years away from having a different one. And at the same time, you probably don't even want to do that. Even if it sucks because you probably just went through a huge backlash from your account holders from the change the first time. So you're like, Whoa, we've got to let that one settle.

We've also got to let our internal teams like go take vacation again because they haven't really had it in the last two years through this whole project. We just burnt a bunch of people out on this. So let's give it a year, at least a year, two years. Then we'll do this process all over again. Right? So, I mean, it means your innovation cycle for something like that is like half a decade.

And if you think about the [00:57:00] pace of technology and what happens in technology outside of banking in five years, it's mind blowing, right? Like think about chat GPT today versus chat GPT five years ago. Right? Like it seems almost alien. It's so other worldly. Right? And so for the banking industry, like that, that pace of innovation is very askew from the outside world.

And I'm not saying that we're a unique industry and that there aren't other industries that are facing similar challenges, but we're getting to a point where consumers also. Don't know and don't care. They don't know that you have this big, you know, lethargic core banking platform that you have to deal with to get around or they don't know that you, you know, maybe have a digital banking partner that is no longer providing, you know, high touch service for you and moving quickly to bring out deployments.

They don't know any of that. They [00:58:00] just know, Hey, somebody else has this feature. You don't. So. Sorry. Right. Um, and you kind of mentioned earlier too, like we're, we're getting to that point where, um, just I have, you know, a basis point, lower rate than the guy next door. That's not really the differentiator anymore.

And at the same time, um, you know, financial institutions specifically here in the U S are facing a massive, massive, uh, margin squeeze. So. Right. And just really the rate market has, you know, just changed so dramatically over the last couple of years that financial institutions are really kind of struggling to find ways, um, to really be operationally efficient and profitable in this new rate market.

And so, yeah, they can't just be like, Oh, you know, Hey, we need, we need a few extra deposits. Let's just offer a whole nother percent higher on CDs than [00:59:00] all of our competition. That'll help drive up some deposits real quick. They can't afford to do that. Right. And so, um, how do you kind of navigate all of those things of saying, Hey, we have all of these challenges and how we have to kind of differentiate ourselves are, you know, expectation from consumers is higher than it's ever been.

And we've got these challengers that are saying, Hey, you know what? I'm not going to try and take on the whole breadth of, you know, financial services in the sense of what you provide. I'm just going to do one thing. I'm going to do it really, really well. Okay. Um, and that's what I'm going to focus on.

Like, what do you think? Sorry, that was a very long way of getting kind of back to my question, which is, you know, what do you think the potential kind of end state of that is as some of those technology barriers get broken down and maybe it actually does get to a point where, you know, a community financial institution in the U S can say, Hey, you know what?

We're actually going to integrate to a bunch of other things and create our own kind of mini super app where we can do a lot more. Or maybe we can even do things [01:00:00] like change out our core banking or digital banking platform in a week. Right? What do you think that would have as far as impacts on? Um, you know, financial services kind of given your experience in like the Chinese and European markets.

Donat: Yeah, Josh, I can give you like, uh, such kind of story that I know that some European, U. S. big traditional banks, what they, they also have tried to make some fancy application web, uh, for their customers. Uh, but, um, It was not so good at the end because as you said, like one year just for planning, uh, two years for some kind of development after three, four years, uh, you launch and, uh, it's not the thing which you want to have nowadays already.

And so what they have done. Some of them are buying some cool startups, uh, which are, uh, building some products in the fintech. So they're buying them and they're giving their finances and giving, uh, [01:01:00] possibilities to develop a brand, a new brand, actually. But, uh, those startups are already financed by big traditional banks.

That's one way how they have solved this problem. Another. Uh, way, uh, some of the banks, uh, they have, uh, registered to just, uh, let's say, uh, another company, uh, which the name, uh, let's say, uh, bank X and, uh, this bank, uh, this another company is made of some, uh, top specialists from the bank. Uh, plus some cool modern engineers, uh, who are trying to build everything from scratch, uh, without depending on the old core, which they have in their traditional bank and without, uh, all the old teams, uh, which, uh, they have in their traditional bank.

So they're just building everything from scratch. And in, uh, I know that in some cases, uh, there are success stories. So, um, that is also like a possibility. Yeah. Some other banks, [01:02:00] uh, they understand that they should start, uh, let's say eating elephant, uh, part by part. So what does it mean? Uh, they understand that all the things are coming from the core.

So we should update core first of all. And I know that one UK bank, they have just invested lots of money, which they have really, uh, into, uh, an IT company, which build them, uh, A new core and now they're even selling this core and this core is super cool. And a lot of fintech different fintechs, uh, all over Europe are using this one.

And so they found out even a possibility, not only earn on their own current clients, but also to earn on all other clients who are using a different kind of European fintechs all over the Europe and UK, just providing for those, uh, new neo banks, their own core. And so just imagine like all the people, uh, who are using, let's say a new nail bank in the Europe, they do not know, but [01:03:00] beneath that there is a core which was invested and built by a big traditional bank.

And in the reality, all the money which you invest or like put on your balance and Let's say pay some fees inside of this, uh, neo bank, uh, small, at least small part of this money are going to pay for this license of the score. So, uh, what I'm trying to say that, uh, if you're a traditional bank and you really have a money to invest, then you should try different kinds of options and what to do, uh, but there.

Also are different options and what you can do and how, uh, to build some kind of solution. Of course, uh, I have mentioned like some kind of success stories, uh, I'm kind of sure that there are some bad stories when some good traditional bank have bought some kind of startup, but, uh, happy path haven't, um, like, um, came on this, [01:04:00] uh, in, in terms of like application or web, uh, uh, platform.

And, uh, the, uh, Nowadays they do not know what to do. So, uh, you know, that all depends on the team. Uh, I think that nowadays, uh, while you're making some kind of investment in the fintechs or in the, uh, core banking systems, you're first of all, investing not into the product, but you're investing into the team who is developing that because like.

If they have already understood and what market wants, and they have understood how to build a good fintech products, then it's already a huge step. And the majority of such kinds of startups, they just need some kind of financing to leave because like, um, there is lots of competitors nowadays and to compete, uh, and to get and acquire more customers is getting harder and harder, uh, but, uh, still there are different kinds of options for the traditional banks.

And, uh, you also asked [01:05:00] about like different kinds of markets. Uh, I would say that, uh, I think that even in China, it could happen that some kind of super app, uh, In some kind of another way will appear maybe not now, maybe in five years because, uh, our technologies are, uh, like innovating very quickly and rapidly.

And who knows, maybe in five years, uh, we'll start opening, uh, some kind of bank accounts in the virtual reality. Okay. Maybe not in five years, but in seven or 10 or 15, like, who knows? And, uh, during each, uh, technological, let's say, uh, rapid grow. Okay. There is always a possibility to jump in and to build some kind of new, uh, way of, um, let's say user experience for your customers.

And then they will start using your application or web or whatever it will be in the future. So there is always a possibility for [01:06:00] something. I think so. Yeah, I 

Josh: think that's a really great thing. Like there's always a possibility for something. Right. And I think, um, I don't know, you know. This is such a simple concept, right?

And not say, I never went to like Harvard business school, but I bet you this is in like class number one, right? If there's a business that's making money. Somebody wants to disrupt it, right? And the challenge is just what will it take to disrupt that? Does whatever technology, the ecosystem regulation, does it, does it allow for disruption of that at this moment or does it need to be later?

Right? What will the investment take to disrupt that? What's the ROI of disrupting that? But if there's a business that's making a lot of money, somebody is looking at, can I do that too? And can I do it better? Right? Or different, right? And so, uh, banking [01:07:00] is absolutely not out of the question for that. Now, definitely for good reasons and sometimes bad, um, you know, there are things like regulation and compliance that do make it harder to, you know, just come in and completely disintermediate, um, that whole ecosystem.

But at the same time, There's lots of areas of financial services that are incredibly lucrative. So yeah, we're naive to think that people aren't looking around and going, how could I disrupt that? That's interesting. Right. And so, um, I think it's also kind of interesting to me that, um, we still come across financial institutions that don't believe in investing in technology.

Right. And you were kind of touching on this a second ago. Like you have to invest in this stuff. I'm sorry. Maybe I will say an unpopular statement, but this is not a zero sum game. Like if you're just trying to find the cheapest products and the cheapest partners and trying to get everything as cheap [01:08:00] as possible, you are stifling innovation.

Right. And especially in technology, not saying we're going to set aside a significant chunk of our budget to invest in technology. Is going to cost you, it is going to cost you in terms of your ability to attract and retain Account holders because technology is the number one way we interact with our finances anymore, right?

It is no longer. Yes. Don't get me wrong. Like I, and I'll be the first one to tell you, right? Like I sell technology to financial institutions. I love branches. I love the physical side of banking. I think it's incredibly important. I think it's foundational to the differentiation that we have against some of the FinTechs, right?

And having deep relationships with our consumers. But even that being said, and even as much of the like, you know, a proponent of that I am, you have to recognize that the number one interaction point [01:09:00] is going to be digital. Like from this point forward, it just is. So if you're not investing in it, consumers are going to look elsewhere because others are, right?

So we have to be putting a focus on Understanding what are consumers user experience expectations? What are the products and services that they're really looking for out of you? How do you differentiate in that? And then, yeah, I get it. Like, it's, it's like anything else, right? It's like a household budget.

I mean, um, you know, I have to figure out how much money do I have and where are the areas that I need to apply it. Right. But if we're looking at our budget of a financial institution, technology needs to be a really big bucket of that today. Okay. 

Donat: Yeah, yeah, I fully agree with that. And, uh, while he was talking, I just thought that, uh, nowadays I think like, uh, first traditional banks, uh, they feel themselves like we are a bank.

We have lots of clients. We have lots of money. We are investing in different projects, but reality [01:10:00] is that, uh, they will gain even more and their, uh, returns on investments will be higher if they will understand that, uh, If they become it first companies, uh, then, uh, they will be able to earn more because they will get the tools for doing that.

For example, they can build different kinds of applications for their employees to make different kinds of calculations and different kinds of investments. They can work a lot with their clients to understand their patterns on what, what their clients like, what their clients do not like, cause like, uh, There is a lot of, uh, fintechs who are going to the private banking, but what about the corporate banking?

What about the corporate products? And, uh, there is always a huge field where you can find some niche to be good at, and, uh, you will still have your own clients and you will gain [01:11:00] lots of money on those clients because you're cool in the specific field, in the specific niche, and no one, like lots of people.

Companies or private person will come and register their accounts and they will be using your bank account of, okay. Maybe you will not have a, uh, good loans there. Uh, maybe some kind of another bank is good in private loans. Then this customer will take loan in another bank, but, uh, for example, their corporate, uh, account will be registered in your bank because your services are better.

That's exactly like. Uh, about how you feel yourself, uh, in terms of the banking sector, uh, what do you like more and, uh, Think like a lot of, let's say, um, big banks are saying that we are IT first. We are investing lots of money in the IT departments. You know, uh, the problem is that, um, it's not only about the money, it's about the feeling of this [01:12:00] engineers and product managers and, uh, designers who are coming to this bank, because if they struggle with all the regulations inside of the bank, if they struggle with all the processes, if as a bank, you are not Uh, implementing a better processes for a better development for a better, uh, let's say going to the production, uh, for the, your developed product, then, uh, what does it mean?

It means that, okay, you will acquire a good engineer, pay him a big, good salary, but at the end, this engineer will go to another company who provide him maybe the same or even like lower salary, but they will have less problems there in terms of the processes. So that's, that's the point which a lot of, uh, different kind, not only banks, but a lot of big companies don't understand.

Josh: Dude. So, so true. I mean, I'm going to, I'm going to preface this statement with, I don't think that there's, you know, no good people in technology at [01:13:00] community financial institutions. Right. And I'm not saying that there aren't, you know, great examples out there. But at the same time, I mean, look, we are a technology company and we still struggle a lot of times to hire exceptional talent.

Salary expectations are really, really high. Culture expectations are really, really high, right? You want a top tier developer? Right. And maybe they live in the Bay area still. They haven't migrated out because of the, you know, work from remote. And, uh, you know, they have a, uh, 1200 square foot house in San Francisco and a 3 million mortgage on that thing.

Like, yeah, their salary expectations are really freaking high. Right. And on top of that, they're like, Hey, look, I, you know, I can go work at Google and Apple and Facebook and all of these places. And I'm going to have this really cool culture of innovation and I'm going to bring really fun ideas to the table and they're going to get explored and I'm going to get to build [01:14:00] those things and I'm going to get paid a lot of money to do it.

Like that sounds pretty awesome. And then if we're, you know, a community financial institution, we're like, Hey, I'd like to pay you a 10th of that. And then on top of it, I'd like to take all the good ideas that you have. And I'd like to stifle them with bureaucracy, with policies, um, with, uh, you know, process and with regulation.

And you're never going to get to do any of them. Right. That person's gonna be like, yeah, no, I'm good. I'm gonna go somewhere else. Again, please don't hear me. I'm not saying that there aren't amazing tech talent at community financial institutions and that there's not, you know, community financial institutions that are doing this right and attracting that talent.

But I mean, let's be honest, the high percentage is on the other side of it. Right. And it's just because that's not, that's also not what they are. Right. Like, like you were saying, I mean, they need to be tech forward. They need to be kind of tech companies, but they also just need to be financial institutions.

Right. And we also have to understand that a certain, um, you know, [01:15:00] size demographic and makeup of a financial institution is just, it's not going to be a tech company. They're not going to be big enough to bring in a bunch of resources. Yes. If you ask bank of America, like they will say, we're not a bank, we're a technology company.

A 200 million in asset size credit union in Oklahoma is not going to be able to say, Oh, we're a tech company that also happens to be a credit union, right? It's we're a credit union and we leverage technology. Um, so then you're finding yourself in the space of having to partner. And that's where I say, then again, it comes back to like, to your point, you have to have almost the philosophical culture of the financial institution Hey, we're not a tech company.

We may not be, you know, even trying to attack, attract internal top tier tech talent, but we're going to have an open mind. Spirit of innovation around technology at our organization and we're going to work to implement it [01:16:00] through finding the right partners to be able to do that for us. And to the best of our ability, we're going to put, you know, a budget towards being able to do that.

That is to your point, like that is a, that's a philosophical cultural decision now, even more so than it is like a tangible, like we're going to hire a developer. 

Donat Husjainov: Yeah. Yeah. 

Josh DeTar: Um, Danette, this has been an absolutely fascinating conversation and it's really cool to hear about, um, like we kind of started this with like, right, like everything is relative and it depends on what you're looking at.

Comparing one thing to another thing, whether, uh, you know how it stacks up. And so it was really fascinating to kind of hear from you a little bit about, um, you know, the different Asian markets, European markets, how you see the U S market. Um, Before I let you go, I have two final questions for you. Um, for starters, you know, where do you go to get information about what's happening in the banking industry?

Donat: Oh, that's a, um, let's say big also question. [01:17:00] Uh, first of all, um, as far as we are building also a financial products, um, I'm always making or getting a competitor analysis. Uh, I know like what our competitors, uh, in terms of private banking, corporate banking all over the world, especially European and, uh, U S market are doing and Chinese market.

I'm checking by myself. So, um, that's first, uh, way of getting some information. Secondly, uh, I'm all the time checking, uh, new startups, which appear in Europe. In terms of the finances, um, because, uh, I mean, for example, you can have some understanding of the product, how it's working and some, another cool startup appears.

We just like, uh, totally, uh, start, uh, the same product with another idea and with another understanding of how to work with it. So that's why it's kind of, let's say [01:18:00] tech crunch and crunch base, um, helps a lot to find such kind of startups. And, uh, also, Uh, I'm watching all other apps, which are in the top list of app store and, uh, Google store to understand what is nowadays important for the people for different generation.

Uh, cause, uh, I should know how the social media is working in different countries, uh, which apps are popular in different countries. Uh, for example, while I'm traveling to, let's say, Central, uh, Europe or to, to Germany, to Italy, to, let's say, Spain, they have their own apps for, uh, different, um, Just, uh, usual cases like parking a car somewhere, but user experience is different and you can compare, you can understand that, uh, maybe they want, they even want to get a better, uh, user experience, but they do not know that there are other applications in [01:19:00] another country which are working better.

And, uh, this comparison, uh, helps me a lot. Uh, well, while I'm traveling, I'm downloading different apps in different countries to understand how they're working. Just, I'm just curious and I'm interested in different cases. Um, I think that's, that's my own point that, um, I like different kinds of case studies.

Uh, it just happened that, for example, while I was starting, I was taking part in the different McKinsey, uh, competitions, uh, just to, uh, solve some kind of business cases in, in different, uh, let's say aspects and in different, uh, environments. So I liked, uh, uh, financing, uh, financial, uh, cases, uh, where you needed to.

Come up with some kind of new product in the scope of old environment. And, uh, that helped me because nowadays I'm [01:20:00] frequently reading Harvard business reviews, for example, uh, cause, uh, That, that, that's a lot of information, very useful information in terms of different kinds of patterns. Uh, what people all over the world, uh, use, how they, uh, feel, how they click, uh, in different kinds of applications, uh, different rates, uh, different metrics.

Based on this metrics, you can already understand on how you want to build your own product. . So I want, I wanted to make it shorter, but , that was a complete answer, 

Josh: I think. , no, that was a fascinating answer. I think that tells me a lot about why and how you answered questions and, uh, you know, talked about things the way you did today.

Um, so if people want to connect with you and maybe talk a little bit more with you about, um, some of the stuff that you've done, the research that you've done, the experiences that you've had, and if they wanna learn a little bit more about XD data group, how can they do that? 

Donat: Uh, they can easily find me on the LinkedIn, [01:21:00] uh.

By browsing my name, they can write me in the messages I'm usually replying. And, uh, for example, if some kind of product managers, uh, have their own cases, for example, not only in the financial sector and uh, they're interested just to discuss maybe, uh, I'm open. Just, uh, let me know. Write me, let's find some time.

Cause, uh, I like solving, uh, some kind of hard cases and, uh, I think that I'm kind of good at it. So I'm open for all the people who are interested in contacting me and speaking. 

Josh: Awesome. And if they want to learn more about, uh, your company, how do they do that? 

Donat: Uh, we have our website, so you can go to xdatagroup.

io and, uh, you can also find the website in my LinkedIn. So, uh, There is lots of information, what we are doing, who we are and, uh, how to contact with us. 

Josh: Awesome. [01:22:00] Well, hey, thanks for coming and being a guest on the digital banking podcast and that appreciate it. Yeah. 

Donat: Thank you, Josh. That was nice podcast.