Stephen: This is your host, Stephen Sargeant. Got a different shirt on, a little bit of white, brightened up a little. We have an amazing episode on the Around The Coin podcast. We talked to Brian Muse-McKenney. He is the Chief Revenue Officer of Episode 6. They have a payments infrastructure. We talk about BaaS. And even CaaS, you know, cards as a service is a thing too.

We talk about traditional banking, what are the challenges and bottlenecks, and how, you know, the evolution of the payments infrastructure around the world. We get into WePay, Alipay, everything that you can think of that is powering entrepreneurs. That's Powering The Tech Sector. This is such a great episode.

And they're also hiring. So if you're looking to get into tech, maybe listen to the whole episode. And Brian says, Hey, reach out to him as episode six is growing. This is a great company, great organization, but an even better conversation with Brian. Hope y'all love it. Let me know if you do.

Stephen: This is your host Stephen Sargeant, the Around The Coin podcast. Today we're going to talk about payment, infrastructure, maybe even a little bit of banking as a service, and talking about, you know, small businesses getting capital.

We have Episode Six, Chief Revenue Officer Brian.

Tell us a little bit about yourself and maybe tell us what a Chief Revenue Officer does, because I think people have heard the term, they think they know exactly what you do, but I think maybe you do a little bit different things than people are expecting.

Brian: Great first question. Good to be here, Stephen. Pleasure to meet you. I'm Brian Muse-McKenney. I've had a long career in, in banking. Spent 16 years working at HSBC and at Citi. In executive roles within payments, building deployment, deploying payment products around the world. And I joined Episode Six which is a financial services infrastructure provider. So, we power banks and other financial technology companies with the infrastructure. Through APIs, cloud based services to build and run a wide range of products from credit cards to virtual accounts installment loans, and actually joined as having been customer number two, which I'm happy to share more about in that journey. And, you know, in terms of chief revenue officer, really that's responsible for growing the business we operate in over 30 countries today serve over 50 enterprise customers that use our technology to serve their customers, over 25 million end users, you know, in terms of that like day to day remits, everything from marketing and brand and strategy, creative, sales, partnership development you know, the whole end to end, needed to grow revenue for a growth company like Episode Six.

Stephen: That's all. That sounds like a lot of work. Why the name Episode 6? It sounds like it should be a video game. Maybe I'm getting like the Rainbow Six vibe. Why the name Episode 6 to talk about the whole infrastructure when it comes to payment and other financial products?

Brian: We have We have three co founders and they've been in the payments industry for you know, about three decades. And this is their sixth venture. And so when they set it up originally we started in, in Asia and Hong Kong and Japan. And they, they, they said, this is our sixth one. Why not call it Episode Six, subtitle Big Star Wars Fans.

Stephen: Love that. Talk to me about, you know, you've been in banking for, as you said, over a decade now. What has changed in banking maybe over the last 10 years that you've seen, especially when it comes to payment infrastructure? And what, unfortunately, has stayed the same that maybe Episode 6 is looking to maybe mix up a little?

Maybe not disrupt, but maybe evolve especially when we think about like archaic and payment rails that we've seen. Disjointed interoperability is always a challenge. Talk to me about what's changed and maybe some of the things that are still the same.

Brian: Yeah. Yeah. Great. So I would say two big external changes and one evolving internal chain. So the two external changes are the real, the rise of real time payments, you know, what we're seeing in the U.S. now with, you know, FedNow, all around the world, faster payment infrastructures being set up that, you know, really kind of change the dynamics of the traditional payments landscape, moving things into real time, bringing down costs, improving quality. And, and so that's forced banks to change. The second has been the Emergence of quite powerful fintech non bank solutions. These obviously started in the consumer space. They've been moving upstream into the commercial space as well. And so in both of those factors, there's a case for change for banks to deal with.

And that internal change has been that increasing recognition. of banks need to do something different if they're going to effectively compete in this modernizing, evolving new payments world.

Stephen: You said that the founders started out in Asia. We're seeing here in North America, I'm in Canada, I have several friends in the U.S. You know, the, the challenger, neobank, open banking hasn't really been embraced like we see in places like Europe, where a lot of organizations and fintechs aren't trying to be banks.

They're trying to provide every service that, you know, except for that one service that they would need to be. To be classified as a bank. What do you, what are you seeing in the places like Asia as you, I believe you're in over 35 countries around the world, what are you seeing in places like Asia, is this second nature and open banking system, or is it a little bit more closed off like we're seeing here in North America?

Brian: No, it's a great question. The, in Asia, the regulators, you know, we talked to, I talked about faster payments, real time payment schemes. More broadly, I would say regulatory proactiveness in developing payment innovation and creating rules that enable better pricing, better services. And so a big thing that's happened in Asia is digital banking licenses. So you're seeing these in Singapore, you're seeing these in Hong Kong. Obviously you saw it sort of originally within China. And, and that does enable the, the non traditional bank players to actually get a banking license that allows for that core deposit, you know, operating current account. That's the sort of missing link of a lot of the neo banks that we see in, in the West. But that, I think that's quite converging that within You know, you had Square building out their own bank, you've got Revolut, you know, and their recent announcement saying they're still on track to get a banking license. I do think that being regulated as a licensed provider is something that has a lot of value. And that we're seeing that trend moving in that direction.

Stephen: Talk to me a little bit about Episode Six. Where do you guys fit into this ecosystem? You mentioned infrastructure. If you look on your website, you, it looks better than the banking website. Seems like you offer more services that let's be, let's face it, customers actually want to use versus a lot of the bank services that we're seeing right now, where, you know, traditionally they have the traditional customers, but people are looking for more innovation, whether it's crypto, whether it's access to, as you said, real time payments.

Where does Episode Six sit? And explain to us, like, we have a payments audience, but explain to us, like, I'm a five year old.

Brian: Um, Okay, five real is a low bar, but I'll take that on. So our offering is infrastructure to help licensed financial services providers build and operate those payment products. And so when you see on our website, the range of products that we offer, we're really looking to target. Banks, and financial technology companies that want to offer those digital first, modern experiences that we know customers want, and to do so in a way that's secure, instant, always available, and feature rich. And so, we're providing it's a, you know, software as a service, so it's a cloud based offering available via APIs. Along with an operator dashboard for the bank or the fintech to run their programs and giving them the empowerment to create market leading products that their customers will love.

Stephen: I love that. And I love how your website shows, like, some of the things that are trending. Or maybe it's, like, your best products, and you're like, oh, we really love these. Buy now, pay later is huge, especially with the young economy, young society we have now. You know, people don't want to wait, right? People don't want to save up to for a year to buy, you know, a brand spiking new bike or cool shoes or a fast car.

People want it now and they'll make payment, you know, they'll take the lower payments.

Talk to me a little bit about this buy now, pay later model and what has been the biggest challenge with, you know, Talking to a traditional financial institution and saying, Hey, this is what the generation wants. You need to align with these services or API into these services ASAP.

Brian: Yeah. So obviously the original Buy Now, Pay Later play by the likes of Karna was a disintermediation of the traditional card business. And so they went direct to merchants, integrate at. That checkout page and then drive distribution to consumers and have this frankly superior service for those types of purchases available at checkout point of sale. Now, where A lot of the industry is going, and this is where banks have, I think, started to wake up and we're seeing a lot of traction and interest in this space, is you can actually bring that buy now pay later service into a card offering. So that as you have a credit card, product, enabling customers to select purchases that they've made after the transaction, in many cases, and say, let me actually term that out as an installment. And that way there isn't the need for a sort of a direct integration into the merchant because you already have the traditional card rails there. Both Visa and MasterCard are really responding to this emerging need of, of, of, of buyers and so enabling these type of installment solutions. More coupled into the card processing infrastructure. That's really the shift that, that we're seeing and banks are realizing. that if they want to offer a competitive credit product, that Buy Now, Pay Later, frankly, needs to be part of that solution.

Stephen: And how does that benefit the customer? So I'm already using credit. Let's say I'm using my visa. Let's just say I bought a furniture set. I moved into a new house. It's $3, 000. How does that benefit the consumer to break that up maybe into 12 payments? A year from now versus just paying it off whenever they get the money.

Brian: Yeah. So, the best illustration of that is that the traditional model for Buy Now, Pay Later was really a no interest offer or maybe like a flat fee offer. And, And when that model As banks look at that, you know, something like our solution that allows banks to offer this is you can choose a fee, you can choose an interest rate, you can choose the combination of the two.

What we're seeing is that they're traditionally, they're typically offering a rate that's below what their credit card is. Revolving rate is. So say the revolving rates, you know, at like 22 percent or whatever, it's going to obviously differ by customer. Maybe the installment rate will be 8 percent or 10%. So for the consumer, I can lower my interest payments related to this sort of one time purchase and have that extend over a period of time where hopefully my, you know, earnings will be coming through and I can, you know, pay that off in a way that ultimately. Delivers a better outcome than if I just left it on my revolving credit card balance.

Stephen: And how does that benefit the bank? The banks have been known some of the banks, you know, that interest rate is predatory in some cases and very beneficial. You're a chief revenue officer, very beneficial to their bottom line. Is this, you know, a lower interest rate attracting more customers, more utility, more data and information around purchases?

Like, how does this benefit a banking partner to offer this product?

Brian: Great question. So I think that a key principle to financial services more broadly that historically has not been there perhaps as much as it's needed, but with the digital age, it's now pervasive is transparency. And so providing transparency to customers of what they're having to pay is sort of the first part of the puzzle.

And then as customers have increasing options that are quite easy to sign up for, providing options. With transparency that provide better outcomes should drive more loyalty from those customers and thus greater usage from those customers and other potential cross selling of additional products and should attract new customers. So in this sort of competitive. world, increasingly competitive world, you know, I think the bank faces an option where we can keep doing what we're doing that's higher margin and hope that customers don't lead, leave. I've seen from banks is that when they're taking that approach, it's just like slow bleed.

So the, the customer doesn't typically say, you know what, I'm closing this account. But what they do is they just start using it less.

Stephen: Using other services on top of that more for their basic needs,

Brian: Exactly. And, and, and, and at some banks, you know, I've seen analysis showing they can actually see that customers are, because they can see how they're paying from their account and that they're

sending money to these alternative providers. And now they're able to dimension, Oh, we're actually bleeding 20%, let's say of our, our, our revenue wallet with this customer. So what can we do to bring that back? And that's where bringing in better services, It's got to be the answer.

Stephen: You talked a little bit about market share.

Why wouldn't banking, you know, large banking, traditional FIs run to Episode Six and say, Hey, we want to offer these services so that these companies aren't going to the services to offer these, not you, the infrastructure, they're not going directly to the competitors and these fintechs and using them directly.

Why wouldn't more banks want to, you know, especially if it's API into a lot of the products and services, what are some of the challenges that you're seeing, or maybe even pushback from some of these banking partners? Is it just kind of like archaic thinking or do they have such a large market share where they are, they don't feel the need to kind of innovate?

Brian: So that's a great, that, that, that question really hits the crux. I think of where banks are at this moment. And so I think probably the biggest impediment to change is their existing technology stacks and banks, we forget. We're at the leading edge of technology evolution. You know, they were the first ones to take the Oracle databases, the first ones to take the IBM mainframes and develop commercial applications, create current accounts, move off of ledgers that were written, create the ATM.

You know, these things were at the cutting edge of technology. In the 70s and the 80s, right? But within that initial push, banks really ingrained themselves in that older technology. And so when you look at a bank's tech stack, they are quite old .And not flexible and rigid. And so to bring on new products and services is an undertaking. That requires investment. Now we have a solution where you can attach our platform as a sidecar to your existing core, which is an implementation pattern I did with HSBC. Even that, you know, there's effort required. A lot of providers are looking for, you know, Oh, I might have to like rip and replace and those things then come to the second point is, is risk tolerance. So banks are, you know, in a place where they're still making money. And the case for change, you know, you can counter it, that, that sort of risk aversion. Well, we could do something new and we could, you know, try to be bold, or we could just do what we're doing and just like kind of take the, you know, steady as it goes, incremental approach. And there are many people in banks whose job it is to manage risk. And manage compliance. And obviously that's critically important. And so it takes a combination of progressive thinking across the bank, not just on the business and the product side, but also on the technology and risk side to come together and say, we need to do something differently. And let's really work at how we can do that in not just an effective way, but also a safe and secure way, because you don't want to get ahead of yourselves and push too far. We've been seeing some of the pushback of that and the impact in the industry. Of moving forward with solutions that are not secure and reliable.

That's the foundation of banking is trust that cannot be compromised. Fortunately, modern technology using it well is able to provide that safety and reliability while still providing those newer products. I think we're just in the middle of that evolution and journey.

Stephen: It's a growing pain, right? And what you're talking about is probably around this banking as a service kind of phenomenon where we've seen, you know, organizations like Synapse backed by VCs like A16Z pretty much collapsing, you know, unsure a lot of times of who's holding which customer funds, which, you know, I come from a crypto background that, you know, those silos of customer funds and where they're being used is always a huge issue.

What went wrong? You know, what, looking at someone that provides a banking as a service applications, where do you think, and I know you don't want to talk, you know, maybe negatively about your customers, but maybe highlight some of the things where companies, banking partners, and the fintechs could go wrong as they're, you know, evolving and getting into this banking as a service relationship.

Brian: So my personal view is that the best place for banking as a service to be provided is directly from a bank into a a platform, whether it's a fintech company or a SaaS company or an e-commerce company, whoever wants to embed the financial services procure them directly from a bank. The model that evolved in the U.S., really because there was not another solution, was to have these, you know, middle players that came in, sat between the platform and between the bank to create the services that the bank wasn't, frankly, able to do themselves. Well, what did we do? We removed we added another layer. So the, the, the, the, the end customer is now further from the bank and thus the risks, the controls, everything. There's just another leg in the journey that by definition adds risk. And so when I was at HSBC, one of the things I led was the creation of a banking as a service division that was the premise of it was let's go direct into. And so that was something that HSBC did for instance, that I led, which was integrating banking as a service directly into NetSuite without a middle layer in between. I think that model is where the industry is going. The conversations that we're having with banks now, they see this direct BaaS model. As the one that's going to have better risk, better control, frankly, better revenue dynamics. If you think about the profitability of the business model, if there's the platform and the bank, you know, that's two participants to share the economics with while also serving customers in a way that creates value. And if you, versus the other model, you know, there's a third player in the picture as well. So that's, I've always believed that's the better model. I think that banks have lacked the technology to do that. I think they're now seeing working with companies like Episode 6 that there are infrastructure providers that can enable them to do this. And I think that's, that's where we're going to see this go.

Stephen: What was the benefit of using this middle, you know, this intermediary? Was it just kind of knowledge? Like they didn't have the knowledge to go directly to the fintech, kind of like when, you know, blockchain consultants came out instead of just going directly to the blockchains and working with them, the consultants would come take a high price, kind of like guide them to which blockchain worked the best, like what was the benefit from a banking partner to want to use a middle person versus going directly to Episode Six?

Brian: So I would say there were two advantages in the model. So one was distribution. If I integrate into, you know, one of those companies, then they will help me get to many more fintechs and SaaS companies that want to embed banking services into their applications. And So it's like a one to many attraction rather than, you know, at HSBC, we had to go and negotiate a deal with NetSuite, Oracle. And so that, that distribution benefit is definitely there, especially for smaller banks that don't have, you know, partnership teams that are able to go out and negotiate with, you know, VC backed tech companies and, and, and, and do this sort of model directly.

Stephen: So let me just to clarify, are you saying it's a leverage thing? If you go through a middle company, they also house several other companies. They have a lot more leverage to negotiate directly with the fintech because they have more buying or bargaining power versus an HSBC going directly to a fintech where it's just one to one.

Now you're leveraging just for yourself. You're not kind of coming in with other clientele or other possible business. Is that the kind of what you're talking

Brian: would be one element, element of it. And the other element is just the resources it takes to actually go and do all those deals and the negotiations, the sales effort, the, you know, the legal documentation, so it's sort

Stephen: only want to see so many demos, I think, at some point, if you're HSBC.

Brian: And then the second part was that technology was a much simpler implementation. So all the underlying bank had to do was create like an FBO account, link in a couple of different parts of the infrastructure. They didn't have to enable, you know, the API part of the platform that the fintechs were connecting into.

They didn't have to enable the KYC And onboarding. So it was an easier technology solution to implement than sort of doing a direct BaaS model where you have to sort of bring an end to end solution with a good API portal. For developers on top of it.

Stephen: And there lies in the risk, right? If you're not doing the KYC, if you're not doing the onboarding, you're also not controlling the quality of, you know, the customer and what needs to take place and vetting them properly. You're kind of outsourcing that, which is never a good idea if you're a bank, even if the accounts are held within your institution.

Brian: I think that's exactly what the OCC is saying. The thing you just perfectly summarized the challenge.

Stephen: Yeah, that's awesome. Where do you see this? So you're saying direct to, you know, direct to Episode Six would be great, or directly to a platform is great. Where else is this, you know, after these collapses, after you're going to see probably some regulatory pushback now, you know, where do you think the industry is going to be heading?

Are we, you know, 12 years into crypto kind of thing, where it's like regulation comes down? Some companies are going to have to adjust their business model. Some will just go out of business altogether. And, you know, we'll continue on with some of the blue chip companies like your Coinbases. Like what do you see now happening in BaaS?

Brian: Yeah. So to clarify one point Episode Six would provide a bank that wants to participate in banking as a service, the infrastructure to do so and have a great. And so, someone that wanted to do banking as a service would be a customer of ours and then say that the, you know, the fintech or the e commerce platform that wanted to embed financial services in this model would go directly to the bank. The bank who has created. and infrastructure to enable that solution to work at scale with security and compliance at its heart. And so that's the sort of direction that I see. I think, you know, we've seen, you know, some bigger banks like J. P. Morgan launch an embedded banking unit. We know that there's another one like Fifth Third created one called New Line. We're seeing a number of sort of community, you know, regional banks that are now looking at this direct BAS model. We'll have some announcements to share later this year probably at Money 2020 on some that we're powering. So I think that model where banks say What we'll do. is a best in breed solution.

We'll build together with the best, you know, KYC provider, with the best payments provider, with the best cards provider, and we will power a fully API enabled real time infrastructure that fintechs and brands and platforms can connect into. To embed those financial services in their applications. And I think that's going to work because as a, as a human, as a, as a person, as a small business, you know, having those financial services in the applications that I'm using in my day to day life, It makes a lot of sense. There's convenience. There's a way to create, you know, cross product journeys that go beyond just your traditional banking app. And so I think that model carries a lot of credibility. We've seen it with the user numbers. It's definitely become a popular way of consuming financial services. I just think the industry Is going through some growing pains and a shifting landscape.

I do suspect that one or two of the sort of tech players that are you know, sitting on top of the banks will get the right risk and control models, will be able to get that right. But I think that part of the industry will probably consolidate into one or two winners.

Stephen: What are your thoughts on, you know, you talked earlier about China and Asia when it comes to, you know, WePay and Alipay. Everything's kind of built into those ecosystems. I was in Dubai earlier this year and last year, and it's like one app does everything. You can order food, groceries, pay, make payments.

You know, call Ubers. What do you think about these like super apps almost and how does that impact something like that you're providing? Is that what you are? Like a super app where it's like they can come to you and get access to all these different services and products that customers actually want.

What are your thoughts around these like super apps around the world? Right,

Brian: question that I've dealt with directly. So at HSBC Hong Kong was the biggest market for the bank, and the regulator there created a new e money license that was an invitation for Alipay and WeChat Pay to enter Hong Kong. And so their strategies were, let's take the super app that, you know, dominated China, Let's go into Hong Kong. And so HSBC faced a pretty big dilemma, which was what do we do? And what the bank decided was to fight back and create their own social payments app called PayMe. I was the chief executive of that unit. We were a fintech within the bank. We got a separate band, got the setup. We knew we had a technology disadvantage. That was clear. So what did we do? We went and scoured the world for who's got the best payments infrastructure that we could build a payments app on top of, and we chose Episode Six, this was me being customer number two of Episode Six. While at HSBC, we ended up building this app called PayMe, scaled that to 70 percent market share in Hong Kong.

So we fought right back and more than doubled the combined market share of those two super apps in the market which was a big success. That's HSBC. Ended up leading the Series A round in Episode Six. I was a non executive director of the company for three years before joining. So it was a really great success story. And I share that because the super app appeal is very high, but it's really hard to land in a new market. It's much more effective to start with a single product and grow it from there versus trying the super app play, which in, in China, it evolved effectively in some other places in Southeast Asia because there were no other options.

If you look at US and Canada and Europe, there's a proliferation of apps that all provide, you know, their piece of what they're doing. And I think the, model that is most successful is, starting with one use case. At HSBC, it was this like social payment. So basically Venmo of, of, of Hong Kong now, you know, paying each other back and forth start with one service and then build out from there now.

So for, for popular apps that are looking to build into financial services now, obviously you have what Apple's been doing. You know, there are opportunities to build out. And I think that like incremental, like, let's build one more product. Let's build one more product. Starting from a platform that already has scale is a viable strategy.

Stephen: And the, is, do you believe maybe that's why like Facebook Pay and those type of things were like paying within apps? I know Twitter's looking to come out with like blockchain based payments as well. Do you feel like that's why maybe those aren't gaining as much traction? Because there are options like CashApp, Zelle, Venmo in North America that's like, Hey, we're already using these.

I don't want to log into Facebook to send somebody money.

Brian: That's perfect. Perfect description. I would say that I think the innovators playbook is quite clear that you have to 10x what's currently available to actually change consumer behavior. And so the Facebook Pay example, you know, just choosing one versus Cash App and Venmo, frankly, even PayPal, is this 10 times better? Not really. And so It's it takes that level of differentiation. I think what, you know, what Apple has been doing with the Apple Card and, and, and that evolution of that whole space for them within payments is, Taking a more disciplined, methodical, incremental approach that may prove to be more successful. Very fascinated to see what X will do.

Stephen: Funny because Apple, all they have to do is add discount, like add like reward points like Starbucks does, that people get discounts off their Apple products and I'm pretty sure they can corner the market based on that methodology

Brian: where you need to add value. You need to create additional value that can't be captured elsewhere.

Stephen: And that's beautiful. Like, we talked a little bit about Asia, China, a little bit about North America. Tell me, you know, you're in 35 countries, what are some of the trends that you're seeing? Like are certain countries, you know, you know, we do a lot of podcasts here and with other clients. In Africa where, you know, blockchain, stablecoins is very, very big there because of, you know, the fluctuating economy, the devaluing of their local currencies.

Do you have any other jurisdictional use cases where you're like, Hey, these customers right here in this jurisdiction, they love our revolving credit because it's so hard. You can't just go to the bank and ask for a loan or ask for money.

Brian: So first region I would highlight is the Middle East. I think it's been probably about a decade of a lot of talk, increasing action, central banks, regulators playing a leading role, in helping to form discourse and pilot programs. And it really feels like it's now taking off, where the Middle East is really serious about payments, innovation, infrastructure, you know, broadening out beyond their traditional sectors. And so whether that's within UAE, We just signed our first deal we announced in earlier this year in Saudi Arabia with a great company called Loop that is basically creating financial infrastructure to help power Saudi Vision 2030. There's a lot of investment going into the Middle East and payments innovation has risen into that where it's moved beyond discussion and is now into action.

So I think the Middle East is a really exciting region. From a payments innovation standpoint.

Stephen: Are you shocked about how quickly they move there when they have made, you know, they might talk a long time, but when they actually take action, how quickly things move from a government level,

Brian: So it's, it's interesting when you say how fast, so one of my previous roles was chief innovation officer for HSBC within global payments. So I had a team in the Middle East that was looking after innovation and it was like the slowest moving region for some time because it was a lot of talk, a lot of workshops, a lot of discussions. So at that part of the experience, I wouldn't have used the word fast, but I think that's now the right word because the groundwork's been there. Some of the consensus has been built. Some of the experimentation has been done. Things are now moving with a lot more speed. And I have been surprised to see it, but very pleasantly surprised. I think it's a great region for payments.

Stephen: do you see, like you mentioned Saudi Arabia and I believe it's Saudi Arabia that has the Neom project. Which is like their own basically start I don't want to say startup city, but it's basically they're building a city. They're building its own infrastructure. Where do you see episode 6 coming into like these startup cities, these digital cities, and saying, hey, we could actually power a whole ecosystem.

Is that possible based on your platform? And do you think you'll see more Cities, you know, within jurisdictions being like, Hey, we kind of want to be our own, have our own financial ecosystem. We're seeing here El Salvador and, you know, using stable coins like Tether, they're kind of building out their own ecosystem.

What are your thoughts around that?

Brian: That's a great question for a chief revenue officer because I think that really hits at Another entrance point of scaled innovation, and that's where public sector intersects commerce. And we have seen that take transit, for example, you know, transit has historically been this sort of like closed loop system where you're only doing it for one thing. We're now being invited to participate in large scale transit commerce. Innovation, transformation programs. Some of them are in cities, some of them are in entire countries now, like smaller European countries, for instance, where they see the transit experience. It sort of lies at the heart of people's day to day lives. So can we build that out to do, you know, real time, you know, always available, secure, feature rich. Payment solutions for the people using them. And so that's absolutely in our sweet spot. It's something that we're really excited on. Those programs by definition go slower because there's much bigger stakeholders involved. You're dealing with government entities of, you know, whether, you know, fully government or quasi government but I think that, that, that trend is happening. There's one that we signed in Asia Pacific that's quite innovative, that?

We'll be announcing later this year. The schemes are involved in these sort of things so I Do think what you've articulated is something that we're going to see. The ways that our cities evolved, you know, historically, payments To say they were an afterthought is probably overstating their influence in how things were thought of and designed. Now, I think that opportunity is a lot more linked.

Stephen: Do you think also, especially around transportation, it's kind of like, Not theft prevention, but almost like they're taking a lot of losses when it comes to counterfeiting, you know, traditional tickets. They're trying to move a little bit more digital. Do you think that has a little bit of aspect to it that, hey, we're tired of losing money or why don't we just build a payment ecosystem?

And also that is huge, right? If, if they have enough data on what, where people are getting off and what stations and, you know, what ecosystems like malls and other things are around those, that, that is also very valuable. To, you know, a broader ecosystem. What are your thoughts around that?

Brian: I think that's perfectly said. The, the, the, you know, the, the, I keep emphasizing security and risk because anything in payments, that's got to be the foundation. And so, you know, that, that, you know, revenue leakage that's taking place, you know, from a city's perspective or a state's perspective, that's real that's cost. And so that's absolutely part of the value that's looking to be captured and corrected. And then when it comes to data, I mean, there's so much you can do when you now have real time information to just better understand where the opportunities are, where further development should go. Payments is a critical part, you know, it's not just like But it's where we spend and what we spend on, and that ability to mine that information to develop, you know, better services and better locations. It's logical.

Stephen: I would love to know what your thoughts are around. I know we've had 40 minutes of. High energy conversation. I hate to dull the moment about APIs and infrastructures and banking partners, my mind directly goes to what you say, compliance and risk, but also like tax and accounting, like who's responsible for tax and accounting and keeping track of all of these moving ledgers that are, as you say, are real time payments what are your thoughts?

Is that a concern of like these large institutions? Like, yeah, this sounds great. But this also sounds like a lot of extra paperwork and a lot of extra reporting.

Brian: Yeah. So, one of my personal beliefs is that, Regulated financial entities are best placed to deliver financial services which sounds pretty straightforward, but in some areas might be quite controversial. And, and, and within doing that, that, then in, it, it brings responsibility and accountability that's clear to ensure that the accounting, the reporting, the reporting, is all taken care of to meet the standards of the regulations and authorities of that jurisdiction. Now, obviously there are new technologies that can do so in different ways within the sort of banking and payment space having a bank grade ledger is of critical importance. That's a, the, the part of. The E6 platform that drew me to it in the first place. The what we've seen in recent industry is when the ledgering is compromised, the whole thing is compromised. The amount of money that is in each account, all the transactions that have taken place off that account, and then off the back of that, the accounting and reporting. It has to be done with 100 percent accuracy, 100 percent of the time. So that can't be compromised. And I think that what we've seen in some instances is that has been compromised and we're starting to see the consequences of those mistakes.

Stephen: Brian, we're 45 minutes in. I'm a little disappointed. You haven't mentioned the word blockchain or AI when talking about your business and that doesn't make sense to me. Where did, like you just mentioned Ledger, where does blockchain maybe fit into some of your infrastructure? Maybe, you know, you have customers that are blockchain companies or crypto companies and that's part of that kind of their payment rails.

Does blockchain fit anywhere in your ecosystem and, you know, where could it in the future if it doesn't already?

Brian: Yeah. So, the way that blockchain fits in, and we have a couple of customers that do this today, is that Episode Six can be an off ramp into the fiat world. So, attaching to a, you know, crypto wallet. The ability to convert into a fiat currency, attach that to a card, and go And spend it in the real world. Enabling customers to maintain their crypto balances, but actually use them in more day to day applications. So that's a use case that's actually gained a fair amount of momentum for us in the past 12 months. I would say there was obviously with the sort of crypto winter, whatever we want to call it.

We've got things done. Cooled off for a bit, but it's, it's the use case is quite clear and I think resonant to provide that like off ramp into fiat with like day to day spending behaviors.

Stephen: And no AI? Like, does AI power anything that you're doing? Or is this kind of all very much API technology? I don't want to say the word traditional technology, but innovative technology that doesn't really need AI at this time.

Brian: So using our technology does not require AI and As a real time platform, where all data can be streamed real time in the patterns that work for you, we do have customers that are taking the data from our platform and streaming it into their AI environments, data lakes machine learning models, so that they can then use the data coming from our platform apply AI into that and deliver, you know, whether it's like different products, cross sell, product improvements understanding their customers better, that side of the sort of AI puzzle.

We ourselves don't provide the AI services, but we provide the real time data for you, the customer, to then perform your AI to fulfill your use cases.

Stephen: We've seen what's called AI washing. We're seeing, you know, companies just kind of sticker on that AI on top of pretty much traditional services. What do you think when you see that around the industry that everyone all of a sudden now, They were offering very similar services, maybe not as great as what you are, and now all of a sudden they're AI services and they're getting a few more meetings from VCs and a few more meetings from banking institutions than they were normally.

What are your thoughts around if that is even happening?

Brian: I think it is happening? I think any one of our inboxes is a testament to that. The, the, I would say I, I take it cautiously and would want to, you know, better understand the actual application that's being promised and, You know, how extensive AI is or isn't a part of it, but using AI in the tagline from a marketing standpoint, obviously right now is something that is resonating. And then I think we'll see, you know, a shakeout in terms of which ones are actually developing real AI applications that add real value and which ones are a bit more smoke and mirrors. And so, I'm personally a little cautious, I would say.

Stephen: We've heard about BaaS, you know, we've heard about SaaS, even, you know, RaaS, you know, Ransomware as a service in the crypto world, but you have something called CaaS, Cards As A Service. Maybe this is like a fun marketing play on words, or maybe like, tell me exactly what that ecosystem looks like.

Brian: So, cards as a service is an ability for a licensed cards issuer to enable their customers to create and launch any type of card product. So from a single platform, Right. Think about how Apple has been using the Goldman Sachs Marcus infrastructure to create and embed their card offering, right?

So, That is a service from the bank where you can, using this cards as a service infrastructure, create different type of card programs. It can be consumer credit cards. It could be debit cards. It could be commercial cards. And from that cards as a service platform, you can create any of these. And, and ours is sort of like a multi tenant platform, which means that if you're a bank looking to distribute These different card solutions, every time a customer. By customer, I mean a B2B type where they're going to take the platform, create a bespoke card program that has different types of card, different schemes potentially, you know, BNPL, rewards. fees, pricing, risk controls, all these different permutations set up that program and then launch it into their application. So it's an infrastructure that allows someone to distribute cards in various different permutations into various different channels.

Stephen: We've seen a rise in like, influencers and like, just communities, like MrBeast, Where do you see a MrBeast using your infrastructure? Would it be like, hey, like a MrBeast card, or like, hey, MrBeast is offering maybe revolving credit to other content creators? Like, where do you see these people that have mass, kind of like a, a WeChat and Alipay, where they have mass amount of users, and they just haven't flipped that kind of financial product switch on?

Maybe they shouldn't. What are your thoughts around that?

Brian: Yeah, I mean, I think the creator economy, this Embedded banking concept makes a lot of sense. It's a bit of a different use in that there's these different units of values, like these coins, obviously, you know, points, like all sorts of different units of value that are being exchanged, some of which have clear monetary values, some of which have soft monetary values, some of which have just social value. And so that's where I think the, the, the ledger opportunities are, to sort of create this interoperable ecosystem of these different units of values, which can be exchanged often in quite micro transactions. I think a lot of different pieces of the puzzle need to come together. I would see the social platforms as likely the ones that would be best placed to try and do so. And with creators and influencers being one of the key focal points of the ecosystem to make the flywheel effect work.

Stephen: Yeah, because a lot of issues are for them is like they want to create more. They just don't have the capital to do it. So they have to kind of draw that capital from or monetize off their audience. Which kind of like lessens their value at some point. As soon as you ask your audience for money, you kind of lose that leverage versus them having, you know, a way to get access to revolving capital that they can create more that will maybe lead to more brand deals instead of monetizing directly off their audience.

Where does, I know you can't talk about, it sounds like you've been hinting at some things coming out. For Episode Six, we might have to wait for episode seven to kind of see what some of those things are. What are you looking for in Episode Six? What are some things that you can talk about? Maybe in generality that you're excited about, partnerships, ecosystems.

You talked a little bit about Saudi Arabia or just some personal things that you're like, Oh, this is kind of interesting. We see it in our world. We're not going to get involved in it, but that would be cool for other people to try and execute.

Brian: So, one that we have announced that's actually a great cards as a service example. In Singapore, Diners Club. Was spun off taken private and has relaunched as DCS Cards. And what they're offering is a one stop shop for any fintech, any SaaS platform that wants to create a card product in their application. can come to DCS and DCS using the Episode 6 infrastructure, Cards as a Service, is enabling that banking license. DCS has a banking license. They're doing all the sort of customer service and then the, the physical cards, virtual cards, credit cards. And they've also introduced a really neat rewards program and a sort of DCS token which starts to go into the crypto world.

And so that is an offering that DCS is now driving throughout Singapore and also looking more broadly across the region. I think That ASEAN region has tremendous potential. Frankly, the whole global South is primed for these types of accessible innovations. And so I think working in, in partnership for Episode Six with a company like DCS, formerly Diners Club Singapore is a great combination that brings accessible financial services with large scale distribution.

Stephen: That sounds super cool. You mentioned customer service. Why are banks that, in your opinion, you know, the customer service, usually atrocious, we're seeing a lot more community banks, especially in the US, using banking as a surface to be more, you know, connect with their customers more, provide more value.

But why aren't these traditional, with so many options, collaborating Why do you believe that, you know, we had Brett King on who kind of came up with the bank 0 model, but basically he's been saying for over a decade that, you know, banks are in trouble, but they seem to be thriving financially and profiting quite immensely from what we've seen.

Why isn't, why aren't they losing that market share in your opinion?

Brian: So real quick on the customer service lens, And tying back in the previous conversation, that's one of the best generative AI use cases from my perspective.

Improving customer service within financial services. I saw Klarna, you know, had done a proof of concept that proved to be quite powerful. So I think that's an area that I know banks are looking at and I can see real application there. In terms of banks positionings. So having worked for 16 years you know, quite senior roles across a couple of different organ, big organizations the bank brand attracts in and when the money's there, banks make money off money,

that's the business model, make money off money with interest rates having risen, that business model has become even more attractive.

The core commercial banking. You know, retail banking model is more profitable now, given the higher interest rates. I think a few years ago at 2021, there was this fascinating dynamic playing out where the market cap of the leading fintechs was starting to really eat into the pie of the market cap of the banks.

And I can speak from firsthand experience that there was a growing sense of concern. I wouldn't quite say panic, but concern. But what's happened since then is like a whew, where the, you know, the, the fintech world both the publicly traded ones and the VC backed ones had a drop in their valuations and banks, you know, post the little mini crisis here last year, really reasserted given the better economics from the interest rate situation.

So now banks can look around and say, Hey, We're doing pretty well again. I think those banks that rest on their laurels at this point in time are going to be in for a rude awakening over the next, let's call it 5 10 years. Those that are, are more honest with themselves and can see the actual customer data that, yeah, we might still have Stephen as a customer. But we only have 80% of his business now. Now the 80% is worth a lot more, so it's great. But that other 20% a year ago, it was only 10%. So it's, it's a slow bleed. And then how are you going to get the Gen Z in? You know, how are you going to get Gen Alpha in when they grow of age?

Those cohorts are not working with traditional banks. All you have to do is play it forward. 5, 10, 20 years, these generational impacts are real and they're really happening. And I can say for certainty, there are banks that are taking that seriously. And even the ones that are taking it seriously, though, there's going to be internal detractors and doubters. And so, some banks are going to be, you know, Quite effective at addressing it. Others best intentions in the world probably aren't going to deliver. So we'll probably end up seeing more consolidation.

Stephen: And why do you think that rise in like the FinTech attraction was? Was it kind of like, Hey, everyone's gone Digital, the pandemic Peloton effect where it's like, Hey, we all have to buy Pelotons 'cause we can't go to the gym. But then when we could get back to the gym, people are running back to the gym and the Pelotons are now $3,000 Paperweight.

Brian: So why did fintechs rise to that position? Better products, better services for customers. What was most effective when I was at HSBC and starting up the PayMe journey in Hong Kong is I'd pull up the Alipay app And show bank executives what Look at what I can do as a customer. Now let's look at R app and look at the difference, right?

And so the reason that fintechs became valuable is because they were offering better products and customers want better products. I mean, it's really that straightforward. Now valuations maybe got a bit ahead of themselves. That's, you know, all relative, right? So that, that reality of better products is, is still out there, which is why banks need a modern technology partner, like in Episode Six, who can help them quickly build those digital first products that meet those customer needs while still maintaining security and compliance and risk standards.

Stephen: And I think you provide a wide range of strategy, right? You've dealt with a lot of banks versus a bank that's never dealt with a fintech before not really knowing what to do. You can kind of say, Hey, these are the concerns. These are the challenges that we ran in with customers that are your side. But hey, these are some of the benefits that we're seeing right away.

If you kind of flip that switch. And that's what I like about like consultancies and companies like yours that have. A wider range of, you know, products and services and customers is you have a lot more knowledge base than versus, you know, a bank dealing directly with a FinTech, I think.

Brian: you were just reading my sales script in all seriousness of that consultative. Part of the selling process is really valued in particular by banks who are looking for that expertise. You know, one of the things we like to say is that we're trusted by banks And delivered by experts. And, you know, I think that is something that really resonates because banks won't have that experience.

At least not at scale.

Stephen: And it's, I'm a customer, like, it's not a joke about the sales, but it's like, yeah, when I'm a customer and I have customers all around the world that are sending me funds in great British pounds, it's like, and my bank is only allowing me to open up a USD in a Canadian bank account. And it's like, okay, now I have to get them to convert the funds.

Now, which account number did they use? And, you know, it gets very tricky and like, Hey guys, I'm, I'm getting paid 5, 000. Like this shouldn't be that hard. And I should be taking a massive hit on multiple exchange rates just to get paid out for one month of services. So to your point, as like a lot of customers and small businesses, we see the value in like, Hey, banks, you need to step up.

We'd like to use it. We trust you, but we also need to operate our businesses. And we also need, you know, to be able to offer our clients some kind of benefit in using it versus like when a lot of my customers are like, Hey, just use Wyze, we'll send you the funds through that way. It's like, well, you know, why can't my bank be as, you know, innovative as a company like Wyze that they can just send funds directly to me?

Brian: That, that, what you just laid out is exactly the case. It, it's a perfect articulation of the case for change within banks because you and people like you, over time, your business will bleed if those services aren't brought into the banking experience. It's quite simple.

Stephen: I love it. Where can people get ahold of you, Brian? What are your socials? Are you, do you open up your LinkedIn DMs? Or you kind of just let them pile up as a big red button at the top of your newsfeed?

Brian: I am reachable at brian@episodesix.com on LinkedIn on as Brian Muse, McKenney. I do read my DMs. I'm not the most responsive, but if anyone comes through after this, I will make a point. Anyone that references this podcast to reply and set some time up.

Stephen: I love it. And is Episode Six hiring? And should we let the people know, are you hiring? You kind of in growth stage? What's going on with Episode Six when it

Brian: Yeah, Episode 6, Series C, absolutely in growth stage. We are absolutely hiring here in the U.S. In Europe, in Asia really around the world. So, if you're interested in a job we've got jobs listed on the website, but also reach out to me directly and I'll connect you to those opportunities.

Stephen: I love it. Last question. If someone's like, Hey, you know, Brian kind of cool guy. He has so much knowledge. He, he has a kind of similar work experience as I do. Like how does one become a chief revenue officer? I don't see MIT or a lot of those people offering those courses, or maybe they are offering eight week masterclasses, what is a little advice for someone that's like, Hey, chief, you're probably like, Hey, chief revenue is a cool, you know, position.

Is it someone with a sales background that like has a lot of experience? What are your thoughts about someone like getting into a position like yours?

Brian: That's a great question.

Stephen: That's the only one that... What do you want me to, do you, want me to take it or? How did we Early stage career, like longer track or more like mid late stage career, like looking to make a move? How would you?

I would say like, Hey, like, or someone very much. So traditional VP, traditional banking experience, but they're like, Hey, like Brian's having a lot more fun than I am. How did he transition from, you know, doing certain projects within the bank to kind of now leading a complete SaaS product, you know, which a lot of people are coming into the technology companies.

I know there's a lot of layoffs now, but we're going to see another surge of people leaving traditional institutions to get into crypto, fintech, fast. How was that transition for you?

Brian: Yeah. So, I'll maybe, so in terms of the transition it's been super empowering and invigorating. You?

know, working within a bank, you know, I had a, an experience. Where to get a new product launched I had to get 168 approvals. That was the, the product governance process of the bank, Right and when I joined Episode Six, And like my first week, I was like, we don't even have 168 people yet.

We're now at 180. So we're over it now. And so the empowerment the ability to be creative, the ability to solve problems, experiment put things into action versus a traditional institution is, is a real. Enlivening experience it's, it's different when you're at a big institution, you know, the brand draws people in when you're working for 2a sort of scale up or a startup, you got to go find the people and, and, and pull them in.

So there's some different dynamics there at play, certainly. In terms of the transition, so I think I always said the first and most important part is be curious and learn new things. So if you're listening to this already, you've kind of already got box number one checked. And then within that it's start networking.

So, you know, talk to the people at your institution that are more on the edge of innovation. Try to work into that team if you can, like attend the industry conferences, like really get out there. And then if you're really interested in making the move start making a list of what are the types of companies that I think I can bring the most value into while also, it's got to be a combination, you bringing in value and them having need for that value and then you also being interested in the space. And so start making a list of, of companies that actually fit the criteria, and there can be some sort of bigger brands, but then do some research and try to find some of the earlier stage companies that are also there, and then get out and start talking to people. I think the, the thing that is always a bit more difficult is if you're just like cold applying the, the hit rate, it can be a discouraging experience.

And so using a network, building a network, having that curiosity, learning. Trying to get positioned within your bank to be doing more things that are at the more innovative, you know, cutting edge, at least within the context of the organization that you work. Those are going to all be things that can start to position it. Probably won't happen overnight, but you know, with a good, you know, 6, 12, 18 months of concerted effort it's definitely something that's possible. And, and fintechs in particular, I'll say they need people with banking experience. It's

a critical skillset. It's an important time within the evolution of the industry to have that level of risk and rigor. I mean, one personal anecdote, the thing that always drove me nuts at bank was all the governance, right? And we're coming into a scale up, you know, what's actually quite helpful is bringing in some governance and some KPI setting and some tracking methodologies, things that, you know, I personally would never thought would be a skillset. But actually having worked at a bank, I've learned how those can be utilized. Cut back a lot of the bureaucracy, simplify, and try to get really to the heart of what we're doing. But actually some of those skills can be quite beneficial in a scale up world, for instance.

Stephen: I love that. This has been one of the most fun conversations that I've had. You're so concise with, you know, the mission and your conversation. This has been a beauty of a, an episode. I can't wait to, to leave an intro and let people know that they can expect every buzzword, every, except for AI and blockchain, they can expect everything. CaaS, BaaS SaaS, we talk about it all. Really appreciate the conversation. And I'm excited even for Episode Six, like now that I know, you know, kind of where you kind of sit. It, it, it gets so invigorated. To your point, I can see why you transition to a company like this is 'cause it feels like you're touching every part of the ecosystem that has a challenge that you can solve for, and that must be an exciting thing to wake up for every morning.

Brian: It really is. And I've, I've thoroughly enjoyed this conversation. This has been, this has been great.

Stephen: Thanks so much Brian. We'll talk to you soon.

Brian: Great.

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