Up's Dominic Pym On Next-Generation Banking

Dominic: The Daily Talk Show.

Tommy: It's The Daily Talk Show, episode 750, and we've got special guests on the show. I was about to say in the studio, on the show though, Dom Pym from Up. How are you, mate? Welcome to the show.

Dominic: Good, thanks. Thanks for having me.

Josh: Now, uh, Dom, I don't know if it's a hard question to lead with, but, uh, you are the founder of Up. Which is a bank. Can you explain how do you start a bank?

Dominic: Yeah, or co-founder first, like there's a few of us. No, no, no, that's fine. Yeah, I think I can't take all the credit, but yeah, starting a bank is not, it's not easy. But also I guess you have to have a desire or a reason for doing it. So for us it was, a lot of it was born out of frustration. Not just with the existing capabilities and systems, but also with our experience. So we worked for, oh, about 5 or 6 years in the banking sector building technology, working with banks. We worked with one of the big Australian banks to build a digital bank in Asia across 10 countries. So that was just a small project and it never quite got off the ground. And then we came back to Australia and started working with another big bank, one of the top 4 banks here, to build a digital bank in Australia and it never shipped to customers either. So that sort of storey is the genesis of the reason why you would want to do it because we're like, well, why don't we just do it ourselves? This is crazy.

Josh: Where was it falling over? Like, how far along do you get before you realise that you can't do it?

Dominic: We're about 4 years in. Ouch. Yeah. So that's like we've made money obviously, but we've been working with Bendigo and Adelaide Bank for 5 or 6 years and we've We build the 5th biggest banking system in Australia for Bendigo and Adelaide Bank, and it has a few different brands that it's sort of marketed by within their group— Adelaide Bank, Bendigo Bank, Rural Bank, Delphi Bank, and so on. But the Bendigo Bank part of it is kind of, I guess, the most well-known nationally. But that's the 5th largest banking platform in Australia. So that's sort of been our core business for the last 8 or 9 years, and that sort of kept us, you know, kept us in business, and that's how we make our money. And then these other projects we were working on were for other banks. They saw what we were doing with Bendigo and they're like, oh, these guys are awesome, uh, let's build a digital bank together. And the frustration came about because they're just morose, these organizations. Like, they're not very good at technology. They take a long time to do anything. And then just getting stuff out to customers and being able to create that sort of feedback loop with customers where you can continually get better and better. Banks are just not very good at that. I actually ask the question, I turn it around the other way and ask people all the time, tell me a bank that you know of in the world that's good at technology.

Tommy: Oh, I mean, the closest one has been CommBank and their app for me. But I still don't think it, you know, it doesn't, it's not up there. I don't think, like, Dom, I just signed up for Up and it took me all of 5 minutes and I did the verification. The only thing that I'm really pissed off about, Dom, is that I didn't ask Mason for his referral. So I got $5 and he got $5. Absolute amateur move on my behalf. But I will be sending the referral to you, JJ.

Josh: Why don't you put it in the podcast link?

Tommy: Well, it's only one. It's only one.

Josh: Okay. I mean, you know, maybe in Discord at Tom Tommy Jacket in the Discord and he'll send you a link.

Tommy: Um, Dom, I heard you say that you're a tech company design-led that's doing banking, which I mean is a, um, what's striking about Up is its design, and I think it's— you're obviously putting that as a piece forefront. How much of that was early days you realised that it needed to be something that connects on a visual level before people even jump into the app itself and its usability?

Dominic: I think a lot of it has got to do with reflecting the personalities of the people that are involved. So like, I've had a design company in the past and we've got a bunch of people who are ex-designers or even some current designers. And so design is sort of embedded in what we do and how we think. It's actually something that is sort of a reflection of the people that are involved. So it wasn't like we came out of bed one morning and said, "Oh, you know, wouldn't it be great to design a good bank?" Like, it didn't sort of happen that way. It's just whenever we do anything, we do it really, really well. And from a technology perspective, but also from a design perspective. And what actually followed was a love for the brand and a love for the user experience and a love for just the way people become embedded in what it is that we're doing and what we're offering. And I think that that love then reflects back to us and then we want to do even better again. So that sort of creates this ultimate quality sort of feedback loop. Where we have so much passion coming from our early adopters and we're so passionate ourselves about making something that we're proud of, that it's just really sort of escalated from there. So it wasn't like a deliberate decision, hey, let's design a cool bank. It was actually just a cool bank came out of what we were doing. And I think that that sort of more nuanced, but, and also more organic.

Josh: Yeah. And so like, how does a bank work? Do you have cash sitting anywhere?

Tommy: Where are you hiding it, Dom?

Dominic: Under the couch, you know, under the mattress. No, no. So it's all digital. So everything we do at Up is fully digital, which means we're using software to solve problems that would traditionally be solved physically with people or in a branch or whatever it might be. So, so no, we don't hold any cash. And also it's probably worth noting that Up itself is a collaboration between my company, Furosha, and Bendigo and Adelaide Bank. So we were with Bendigo for many years, as I said, like building the 5th biggest banking platform in Australia. We do about sort of, I don't know, in the vicinity of $10 billion a month through that platform. So it's a big platform. And that collaboration sort of led to, well, let's do something different and better. Let's launch Australia's first digital bank. They have a banking license, Bendigo and Adelaide Bank. So they have, I don't know, 10 or more sort of banks within their group. And we were able to leverage their banking license. So the money is digital and it sits on their ledger. You know, like they have a core banking system and they hold that ledger. What my company's been able to do in this collaboration is build all the technology. So the onboarding, the actual banking itself, the payments mechanisms, the wallets, uh, interaction with your data, the merchant identification, uh, the whole process right through to customer support, everything throughout the entire lifecycle of Up is digital. Um, and that's why, you know, that's why us as a software company has been able to do that. So our ambition was to launch Australia's first digital bank. Um, and there was no option to get a banking licence back then, realistically. Like, just to put it into perspective for you, to get a banking licence in Australia before this new round of digital banks have launched, it was 28 years ago that a company, an Australian company got a banking license. And before that it was like 100 years. So it's not a common occurrence that people just apply for banking licence and it's very expensive. You need $100 million or more just to have in reserve and then another $100 million to sort of get up off the ground and hire people and whatever else. So it wasn't realistic for us to say, hey, let's sort of launch a fully fledged bank. And the regulations hadn't changed yet to make it easier to get a restricted banking license. So, when we started this journey, the partnership with Bendigo actually gave us that ingredient that we needed, which was access to a banking license. And yeah, that's been an amazing partnership that's developed over the last 8 or 9 years.

Tommy: In terms of the communication between the banks, I mean, how complex is that? So you send money from one account to another, So you send it from up, you know, held on the bank, Bendigo Bank ledger through to CommBank, which is another, you know, bank. And so how, like, it's instant, right? And so how is that, what is going on at the technical level?

Josh: Yeah, we really just want you, Dom, to explain the banks. We don't get it. We don't understand how it works. Where's the cash coming? Yeah, where is it? What's the deal?

Dominic: It's out of control, isn't it? It's hard to imagine that like money's being sent around digitally. Can I just say this though? Like you said, it was instant. Just go back about 18 months and about 18 months ago, it wasn't instant. Like it's a new thing in Australia for it to be instant. And it's funny how quickly it becomes commonplace. Like everybody in Australia now, we get about 1,000 customer inquiries a day. And every day lots of people are saying to us, where's my money? Why isn't it there yet? But actually most of the banking system in Australia is still operating on an overnight or a multi-day process. So if you send money from one bank to another, they call it direct entry, the messages get sent, but they get batched up. So the bank will actually collect all those messages throughout the day, and then overnight they'll send them, and then the other bank will get them the next day, and then they'll batch them up, and then they'll process them the following night. So sometimes if you're lucky, and nowadays they have multiple times throughout the day when they do it, so if you're lucky, it could get there the next day. But sometimes it would take 2 or 3 days. And if it was a weekend or a public holiday or a bank holiday, it could take 3 or 4 days. So that's actually been the system as it's been sort of almost, let's say, forever, or at least our lifetimes. Before that, they were swapping tapes and had punch discs and all that stuff, punch tapes and all that. But, you know, so that system actually is more commonplace than the real-time system. But the new payments platform, the NPP, was introduced into Australia a couple of years ago. Our work that we did with Bendigo Bank— Bendigo Bank is one of the founding members of the NPP. So we were able to actually send the first message across the NPP that actually sent money. And we did that with Bendigo. And then when we built Up, we built Up to be native real-time. So everything you do on Up is real-time. So you can send your money instantly. Now what happens is we just send an electronic request through the New Payments Platform. It goes to say the Commonwealth Bank in that example, and then they receive it and then they process it and they do that in real-time. So it should take less than a minute, usually a few seconds for your money to literally come out of your Up bank account and appear in your Commonwealth Bank account.

Josh: So is the NPP, is that an Australian thing or is that worldwide?

Dominic: Yeah, so that's Australian. Every country— banking's complex because every country has their own technology and their own banking system and their own regulation. So legally, technically, and practically, every country is different. And there's very few banks around the world that operate in multi-jurisdictions. And those that do, you probably know, you know, like a Citibank or HSBC or whatever, you know, you get to know the name of them because they're so prevalent globally. In the modern sort of players, you know, Revolut have been able to operate in, I think it's 35 countries or whatever it is. And they're not technically a bank, they're technically a payment service. So PayPal would be another one that you'd know, or Square or Stripe. And so these payment companies have been able to operate in multiple jurisdictions, really by setting up the practical, the technical, and the legal capabilities in all of those different jurisdictions. If you want to send money internationally, You can send money internationally using another system called the SWIFT. So we talked about direct entry. I didn't know we're going to go so deep on banking. No, this is good. We talked about direct entry, which is sort of the traditional system. We talked about NPP, which is the new way to do it real time. There's another international system called SWIFT, which is sort of the most common. And the SWIFT system is similar to direct entry where you send a message and the message goes from an Australian bank to what they call a correspondent bank, which is a bank that has an international presence. And then the correspondent bank in Australia then sends it to a correspondent bank overseas. And then the correspondent bank overseas then sends it to the destination bank. So if I was sending money from say, App to Monzo in the UK, then the old-fashioned way of doing it would, App would send it to, I don't know, NAB or someone like that. And then they would send it to Bank of England or Lloyds or Santander or somebody in the UK. And then they would send it on to Monzo. Now that's the old-fashioned way, but it's been like that for decades. What's happened recently is that we've seen the advent of this new way to send money internationally, like TransferWise. And Up was actually the first bank in all of Asia Pacific to integrate with TransferWise. And we announced that last year, we're going live very soon. And what that allows you to do is not move the money. So we send a digital message, essentially. This is the easy way to sort of describe it, is that we send a digital message to say, okay, there's a bank, which in the case of TransferWise, they might use Bank of New York, or they might use NAB, or whoever. Or Bank of England, whoever, and they hold the money in both Australia and the UK. And if I want to transfer money to Monzo, I send it via TransferWise. So I send that money from Up to TransferWise and then it's instantly available in my Monzo. Like just like bang. And so that's a whole new way of transferring money internationally. And we're very proud of the relationship that we set up, you know, like first in Asia Pacific, not even just first in Australia with TransferWise, who are the dominant player globally for doing that sort of real-time money transfer. And it's just amazing that the technology in the last 2 or 3 years has changed the way that we interact with money and changed the way that we connect and even think about money.

Tommy: So if we're jumping back 20 years, when did online banking come into effect at a customer level?

Dominic: A little bit less than 20 years ago. So probably 16 or 18 years ago, but maybe 20 by now. I'm getting old and I sort of forget.

Tommy: I feel the same because I was like, oh no, I think I had it at 15. Mum set me up.

Josh: Got me on comeback. The Dolomite or whatever.

Tommy: No, well, no, it was well after that. I did the Dolomite. Did you do the Dolomite, Dom?

Dominic: Yeah, absolutely. Most Aussie kids did Dolomite when they're at primary school. Yeah.

Tommy: I mean, how much of a problem— you mentioned getting a bank, becoming a bank is hundreds of millions of dollars of a process and they don't give them out much. How much of a problem is it that that is the case? That there isn't, you know, 15 banks in Australia or is there? I don't know.

Dominic: No, there are. There are. There's hundreds of banks in Australia, but there's There's probably, I don't know, 150, but there's about 500. Maybe it's— last time I looked at it, it was 455. I'm going to just round it to say 500.

Tommy: How many people are they? Because I only know the top 4, top 5.

Dominic: Yeah, well, that's right. So the credit unions and building societies— I'll tell you in a sense. So there's the top 4 banks, the 4 pillar banks in Australia account for about 85% of the market. So everybody knows NAB, ANZ, Westpac, and CommBank, right? Everybody knows them because they dominate the market. So they have a huge market share. Then there's the mid-tier banks, your Suncorps, your Macquaries, your INGs, your Bendigos. There's a whole plethora of mid-tier banks that are very popular, but nowhere near as much market depth as those big 4. And then there are hundreds of credit unions, building societies, and smaller regional banks that, you know, you would know them if you mentioned them like Heritage Credit Union or Credit Union Australia or Bank Australia. You know, there's heaps of them and people, maybe the Police Credit Union and so on. People who use them know them really well and have grown up with them, but they might only have one location in your small town, or they might now have an online presence, but only have 50,000 customers or 10,000 customers or whatever. So the market is quite disparate. So there's probably between Bendigo Bank of Queensland, Suncorp, and Macquarie, they hold that sort of mid-market percentage of let's say 10 or 15%. And then there's only single-digit percentage for the entire rest of the market. So yeah, so it's quite a long tail. In terms of banking. And like, I'll put it this way, Up is already, you know, we're growing so fast. We've only been alive for 18 months. Probably by the end of next year, I've been saying, but it might be a little bit longer because we had some slowdown with the pandemic, but probably by the end of next year, but before our third birthday, we'll be a top 10 bank in Australia.

Tommy: Up there with the CommBank and these other like—

Dominic: Yeah.

Josh: Wow. And so, Dom, having the experience of being able to build the tech, and working with banks to try and integrate the tech and then doing this deal with Bendigo Bank. I can imagine that it's a hard conversation to speak to these sort of older businesses and say, hey, we want to partner. We don't want just to be a service provider for you, but we actually want skin in the game. What was that conversation like?

Dominic: Yeah, that's a, I mean, that's a pretty insightful question. Not a lot of people, I guess, understand the nuance between launching a bank and having a part in it. Like, for us, we were literally a service provider to banks. That means that they would call us a vendor, you know, like we're someone that builds software and licences it to them. What we wanted to do with Up was we actually wanted to have ownership in Up itself, and we wanted to be able to share in the margin that we generate, all the revenue and the profits and so on. And so we wanted to build an enduring business. Like, when we think about building a new bank. If you look at your sort of Bendigo Banks or your Westpac or whatever, these banks have been around for 150, 200 years, you know. So, so our view was that we wanted to have a multi-decade strategy where we could build something that was enduring. Um, and even if the ownership of it changes over time and you become a public company or whatever it is, we wanted the brand and, and, and the, and the business that, you know, up itself to be able to be around for 100 years. And, and, and so that's really building a legacy.. And our share in building that success and our share in that sort of future and a reward, even if it's small, we just wanted it to be meaningful. You know, we wanted to change people's lives. We wanted to bring something to the market that's new competition, that's new design, that's new technology. You know, we were Australia's first cloud-hosted bank in retail. We were, yeah, because there'd been some business ones that have had a crack at it.

Tommy: When you say retail, what does that mean?

Dominic: Retail banking, so for consumers. So for example, Tyro is a bank that deliver FPOS solutions and business banking. And they got onto the cloud, you know, very early days. So we were the first cloud-hosted bank for Google worldwide. And, you know, we were the first bank in Australia to have instant issuance with Apple so that you could literally sign up a bank account and then have Apple Pay in your wallet instantly. On your iPhone. And then we did exactly the same with Google. So we're the first bank in Australia to have instant issuance on Google for your Google Pay. And then we did the same with Samsung. So, you know, there's a lot of firsts. So the first TransferWise, first cloud, we're the first to do native NPP with Ausco. So lots of firsts. But that's what we bring is that we're bringing that different way of thinking and that innovation. We call it, like the way we sort of coined it, is we call it technology-led banking. And that's compared to bank-led technology. So when I asked that question earlier, I mean, you jumped in pretty quickly with the answer, you know, Commbank. And I think Commbank are reasonably good at technology. They're okay. They're very good at marketing. They're very good at talking about it. But there are some banks around the world that— BBVA in Spain, DBS in Singapore, you know, they're few and far between, but they're pretty good at technology. But actually, generally speaking, technology is an enabler. And as an innovator, and it really changes the game. And so for us, it was like, how do we come in and deliver technology-led banking instead of bank-led technology? And it sounds quite subtle, the difference, but it is astronomical. So if I just mention a couple of companies that you might have heard of that have done the same thing but in other industries— Airbnb, Uber, Amazon, Skype— you know, these are companies that have never had an industry.

Josh: But so using the analogy, say, um, Airbnb. If Airbnb was to go to a real estate, like a big real estate company that does property management and says, hey, we, we want to work with you on this, that, that's the sort of, I guess, an example, like going to a bank and saying, we want to work with you to do this. I can just imagine the amount of friction in legacy and trying to convince people now we've got to do it this way, we've got to keep it siloed. I'm curious as to what the actual friction points or what is the agreement to make sure that Up can keep innovating and you don't fall into big bank, sort of big ship, slow-moving behavior?

Dominic: Yeah, I think humour has a strong part to play in it. So I used to joke, so Marnie is the CEO or managing director of Bendigo and Adelaide Banking Group. And they're a big public company in Australia, 5th largest retail bank. And you have, you know, tens of billions, hundreds of billions in assets and all that sort of stuff. So those conversations for us when we first started, we're just 2 blokes, you know, 2 blokes with an idea. By the time we got to saying, hey, let's do Up, I think we're about 20 people, maybe, yeah, but maybe 25. And so we're a small team going to the, you know, a really big Australian company and saying, you know, so humour had a big part in it. So one of the things I used to joke with Marnie is I said, Hey, if we get this right and we deliver this amazing innovation and this technology in banking, one day Up will be bigger than Bendigo. Now it's not like, it doesn't, it doesn't. Yeah. That could be, that'd be really. But if we get it right, you know, I'm joking when I say if we get it right, Up could acquire Bendigo Bank. You know what I mean? Like, you know, Up could actually literally, literally be the future. And I think if you think about it, and that's why I say humour's important, but if you think about it in that sense, there's obviously no smoke without fire, right? I'm not saying that stuff purely in jest. I'm also saying it because if we get it right, if we can create the right kind of collaboration between a traditional organisation like Bendigo, and they're actually quite innovative, they've done some amazing things. Bendigo introduced the debit card to Australia back in '86, and they introduced community banks to Australia where they share the revenues with the community 50/50 and all this stuff. So they've done some really innovative things and a whole bunch of them, I won't go through them all. Internet banking, they're one of the first banks in Australia to have of internet, if not the first, they were one of the first. Like, there's a little bit of an argument about who was exactly the first, but I think they were within a few days of each other about 20 years ago to launch that. So they're already quite an innovative organization, but they find it difficult to move fast. And we basically went to them and said, look, the way we work together at the moment is that we're a bank-led technology project. So you guys lead it and then we provide the technology. And we did some amazing things. And I'll give you an example. But we went to them and we said, can we flip it on its head? And can we be technology-led banking where Ferocia actually designs, imagines, builds, delivers, embeds, supports? So we take the entire customer lifecycle and we use technology and Ferocia runs it. Could we do that? And to the credit of, at the time, Mike Hurst, who was the MD at the time, and Marnie Baker, who was the incoming MD, and she's the MD now. It was me and my business partner, Tomo, and Marnie and Hersty, and we got in a room together and we had that discussion. And to their credit, they said, let's give it a crack. Now, we don't know if it's going to work, but we're going to back it. And I think the—

Tommy: How bold was that? Yeah, I was going to say, how bold?

Dominic: It's incredible. Incredible. Yeah. Like, absolutely incredible. Now, to your question though, like, how do you manage the risk of not falling into the trap or not being slowed down and all the rest of it? I think that bravery and that humour has a lot to do with it. But, you know, the willingness of Bendigo to trust us. So I always say that you can't have a bank without trust for the relationship with your customer, but, you know, because you're dealing with money, but you also can't have a collaboration for banking without trust. Now, let me say this, we were the first collaboration of its kind where a fintech and a traditional ADI, they call it an Australian Deposit Taking Institution. So where a traditional ADI and a fintech actually partnered together and got regulatory consent consent to run a digital bank. First time ever.

Tommy: What's that process, Dom? What's that process? I mean, I could imagine there's a lot of, you know, presentations in big bank buildings and, you know, you're walking out with Tommo just thinking, mate, we don't have this. And then, oh, we've got this. What's that process like? How long was it?

Dominic: Well, first of all, me and Tommo have very complementary skills. So Tommo is all about the strategy, the business, the sort of culture and all that sort of stuff. Very much about the sort of hands-on, the technology, the design. So I think that first of all, that's very complementary. So having a partner in crime is really important.

Tommy: Especially named Tomo.

Dominic: Tomo, really good. I sort of call it the yin and the yang. You know, like we come from very different backgrounds, very different experience, but we have the same what I call moral compass. Like we want to strive for the same outcome and we have different ways of going about doing it, but we're actually trying to help people. So So I think if you have that sort of alignment, then you can go in quite confident. And so for me, there's two ingredients to success. And I learned this when I was a little kid and it's always stayed with me all my life. I was listening to, I think it was Triple J and I think it was Dr. Karl who said that there's two ingredients in successful people. One of them is curiosity and the other one is confidence. So you can have this curiosity like, hey shit, could we build a digital bank? Do you reckon we could be the first in Australia? What do you reckon? And that's fine. That's the curiosity component.. But the confidence, I mean, it takes a bit of gall to stand up and go, we can do this better than 200-year-old institutions that employ tens of thousands of people and that have billions of dollars. Like that takes some gut, that takes some guts. So I think those two things together, the curiosity to innovate and to try new things and to be different. And then the confidence to stand up and say, hey, let's give it a crack. So to answer your question, bloody hard. But Marnie and Hersty were amazing. And they were very supportive of us doing something new and different. And we'd worked together for 5 years, so we built that trust. So that was what I was getting at, was that you can have trust with your customers and everything, but having trust in the collaboration, having trust between Bendigo and Ferocia to be able to have a crack at it and for them to step back and say, hey guys, uh, take the reins, take the running with it, and you design it, you build it, and then you run it. I mean, that, that, that's, it's pretty much unheard of in the banking sector. We don't really know of any other examples around the world.

Tommy: What does the yes from them mean for the landscape of the big banks? And you know, that's them innovating in a way through you guys.

Dominic: Yeah, I think if you boil it down to its essence, and it's hard, I can't speak on behalf of Bendigo, but what I can say is that they are cementing their position as number 5. The big 4 banks have 85%, so if you just do your maths, it's about 20-something percent each, right? That's on just an equal basis. Now, Bendigo's market share might be, I don't know, 3, 4, 5, 7%, something like that, single digits. So for them, and what I talked openly about with Marnie at the time, and obviously Hersty and Tomo as well, is that, but particularly me and Marnie, we sort of get into the detail of it, is that if we can get Bendigo to 10% market share, imagine that. Like, can you imagine? Yeah. Like, you know, Bendigo been around for 160 years. They came out of the gold rush. In Victoria. Imagine if, you know, in 10 years from now they could be up there competing with the big 4 banks. I mean, that is our sort of dream.

Josh: What is the brand integration like? Like if you go into a Bendigo Bank, will they offer an Up product?

Dominic: No. We deliberately set out and we had a lot of debates about whether we wanted to be Bendigo powered by Up, whether we wanted to be Up powered by Bendigo, whether we wanted any overlap and crossover between the brands. And I'd say it this way, I don't think it's sort of top secret confidential to say it, that there's probably two main reasons why we took the path that we did. One was none of us had any idea whether it would work. And we want to protect that 160-year-old brand. Like Bendigo have a really great— if they're not number one, they're one of the top trusted brands in Australia. In fact, they're in the top 20 brands in the world, Bendigo Bank, in terms of trust. I think they were rated 13 or something like this, up there with Apple and Amazon and those sort of brands. So So for me, we don't want to mess that up. I'll probably use some swear words, but you know, we didn't want to stuff it up. Whereas the other part of it was that we wanted to have the licence to build something new from scratch. So one part was protecting the existing brand, and then the other was building something new from scratch. And to have the licence to start with a clean slate and to literally invent an entirely new brand and not to have, you know, powered by Bendigo, whatever. If you look at our terms and conditions, you can find out that Bendigo's there. We're very open about it because we have to be for consumer regulations around the fact that we're backed by Bendigo in terms of where your money sits. You know, your money sits on their ledger. And so, for us to be able to operate under their banking license, we have to let everyone know that Bendigo's there. But they're almost there like a big brother or a big sister, like looking out for us but not getting in our way.

Tommy: Yeah. I mean, while we're on the trust conversation, you seem like a trustworthy dude. I mean, but when it comes to developing a digital bank and trying to earn the trust of the consumer or the person that's signing up for Up Bank. I had no idea it was Bendigo Bank until Mr. 97, our producer, wanted to change his bank details through PAYG. And I did it and I put in the bank and I was like, mate, I had to call him. I was like, dude, you're with Up. It says Bendigo Bank. And so, I mean, that's me then joining dots and saying, okay, it makes a bit more sense. That's maybe a trust point earned. To it, but what are the steps? What's the first step as a business trying to say, when we put it out there, how we earning trust very quickly, you know, and then over time as well?

Dominic: Yeah, I'll just say this on the Bendigo thing is that at Up we have our own BSB. So in Australia, every bank has a sort of a number that represents each branch and each bank. And so we actually, it was one of the decisions we made very early on is that we wanted Up to have its independence and have its own BSB so that, you know, it's obvious that it's still related to Bendigo but it's its own thing.

Josh: So why is that coming up? Why would that be coming up?

Tommy: I think so what I did was I may have searched whatever came up when I put in the BSB, you know how it just prompts you to tell you, and then I searched that and then it says Bendigo Bank. I found it somewhere, but I had to call Sims and ask him. Is this correct? And he's like, yeah, that's good.

Dominic: It'll still say Bendigo because a lot of— and this is actually me having a little bit of a dig at the other banks— is that a lot of the traditional legacy banks—

Josh: They're trying to push you down. They're trying to hide the fact that—

Dominic: Well, no, no, their technologies are so bad that they haven't updated their systems. And so what they do is they look up the BSB in the national database and the bank that owns that BSB is Bendigo, right? Because it's their license. But the name of the institution, the actual branch, if you like, is up. You know, and so they're meant to display up, but a lot of the legacy banks don't. And so when you look up— yeah, this is bad code. Yeah, so that's kind of curious. But anyway, so, so back to your question, um, how do you build that? It's really interesting for me because, um, a lot of people talked maybe over the last decade about this thing called the new trust, you know. And the new trust, there's lots of books about it and all this sort of shit, but it's basically I can download an app from the App Store and I can, I can give my whole life over to a Facebook or an Instagram or an Etsy or a Google or whoever it is that, you know, the apps that you love, Pinterest, whatever. And you really embed yourself in those apps and you trust them almost like from day one. And that trust equation is really coming through Apple and Google because, you know, you're assuming that they've curated that app and that it's not going to have malware in it and, you know, whatever else. And so that's not trust on a fundamental level, like I trust that brand, that's more I trust the technology. And so what we found is that I now call it the new, new trust. So people have to trust the brand They have to trust the technology. They have to trust the banking, the money, the component of it that is going to be secure. And that's more like you think about like a vault, like a banking vault. Is my money safe? They have to trust the security. They have to trust the data protection. Like a lot of people worried about privacy and hackers getting in and breaching and all this stuff. So there's so many different levels of trust that nowadays I sort of call it the new, new trust, because it's like you're not gaining people's trust in the old-fashioned way that you used to open up a storefront and then you get to know Bob, and Bob was a really friendly guy, and then you get to know Mary, and Mary's a really friendly person, and they never let you down, and they gave you a tab at the local grocers. You know, that's how trust used to be built. It's totally different now. Now that trust is built without that personal interaction, and you're downloading an app from the App Store. So, so we have to build a brand, we have to build technology, we have to be rapid in our response to customers, we have to keep improving and iterating all the time and demonstrating that we, you know, that earn people's trust. We had to have great customer support, great customer service. Like, our average response time to customers is sub-2 minutes. Now, to us, that was really important because what we were thinking about is, forget about banking, people hate dealing with, I don't know, Telstra, or they hate dealing with a utility company or whatever it is because the customer support is so horrible, right? And you go overseas, or you have to wait half an hour on a call centre and all this. So we were thinking that part of the trust equation is to have the most amazing way for customers to actually reach out to a human and interact with a human. And in the early days, it was me and Anson and Mike. And so that, you know, it was actually the people that work within Up and sort of the founders of the business were answering customers' questions. And that was really good for that feedback loop, but it was also really good for building trust with those early adopters. And now I'll just say this last piece. Now a lot of the trust that we build with people comes through referral. And you made the jokes before about the referral code, but about 50% of our growth is organic. Because everyone loves Up and so they recommend it to their family or their friends or their colleagues or whatever. And so a lot of our growth has actually just been fueled by people telling their mates at a barbecue or at football training or whatever, or around the kitchen table eating dinner, "Oh my God, this Up thing is totally amazing. I've never seen a bank like it." And then suddenly that endorsement is that they are lending their trust to us. And so people are trusting their friend or their partner or their colleague rather than needing to trust us.

Josh: If you go to the US, uh, it seems like it's a pretty archaic system in regards to— like, when they announced, uh, Apple Pay, when you think about what Apple Pay is, it's just like tap and go or any of those sort of, uh, services. Where in the US, I went to a Subway and I tried to pay with PayPass and it blew their mind. I know a lot of people are still getting paid with checks.

Tommy: Oh yeah, we saw checking, get your check, you know, cashed here.

Josh: Exactly. And then even Mike, who listens to the show in the US, he was transferring some cash and he said, can I Venmo it to you? And so there are these companies that are coming up now trying to solve a problem. Even the Kickstarter campaigns where they're taking magnetic strips and trying to, you know, put 5 cards onto a single Card. What do you think of where the US is when it comes to the fintech? And do you think that from an Australian perspective, are we innovating and can we bring any of that to the US?

Dominic: Yeah, I think Australia is miles ahead in some aspects and the US dominate in others. So it's not a linear equation. It's not like black and white. It's not like you can say one's good or one's bad. So in the UK, they have an amazing sort of infrastructure in terms of capital and access to capital and really relaxed regulations to make it easier to run fintechs out of London. London's like the global fintech sort of, you know, number one city for fintech in the world. And so if you want to do fintech, then London is a great place to do it because of the regulatory and the capital environment. The US itself is so archaic in the way they use cheques and the way that they still have magnetic swipes and the way they charge money and each bank manually transfers money to each other. And it's a really archaic thing. But what's amazing is out of certain pockets in the US, you get these incredible companies like Square and Stripe and PayPal and Braintree and I don't know, like lots of amazing fintechs that sort of pop up out of Silicon Valley or pop out of New York or Seattle or whatever. And so you have these pockets in the US of this amazing innovation But they are generally more like across the board coming from a really sort of a low base. So the way I like to say it is that in Australia, the bar is so high. We have the highest adoption of things like the iPhone and Apple Pay and Google Pay. And so we have the highest adoption of point-of-sale tap-and-go payments. We have free real-time transfers between any bank. And we have had for decades free transfers between banks. Like in the US, You get Venmo because it's too hard to transfer money between different banks. You've got thousands and thousands of banks and some of them will only accept checks.

Tommy: But they just sent a couple of people to the International Space Station.

Josh: Like, how?

Dominic: It's crazy. You know what I mean? It's out of control. So you've got to find those niches. And I think that if you look at a company like Square, for example, what they were able to do is they started out with a magnetic swiper. And the innovation was to embed that into the microphone jack on a mobile phone. I mean, it's an incredible idea, right? But now what they do is they do business lending, they do real-time payments, they do payment splits, they offer a cash register. They do so much stuff now. And they're such a— they're an $80 billion or $70 billion public company now, right? So I think that it's lazy. I'm not picking on you, but it's lazy to say that America are crap at all this. They're not. Generally, generally they are, and their system is systemically behind the rest of the world. But, but there's pockets of innovation there that are well in advance of us. But anyway, my point was that the bar in Australia is so high that to launch a digital bank here is a lot harder than it is to launch a digital bank in the UK or the US, because those markets are absolutely ripe for disruption. Whereas Commbank and Westpac and NAB and ANZ and ING and Macquarie and these guys are already world leaders in digital. They're already delivering these amazing digital apps and they have, you know, tap and go at every shop in Australia. And they have, you know, cardless ATMs and all this amazing shit that you just don't have overseas. So for us to launch a digital bank in Australia, I would say number one, it's a lot harder. And then there's a much harder bar to cross. But actually it means that Australia is a great testing bed because then once we dominate here in any part of the fintech sector, not just in banking, then you can actually use that as a foundation to take that technology overseas. And America is like 15, 20 times the size of our market. So you've got this— it depends how you want to measure it, it could be 100 times the size in terms of capital market. But it's, it's an amazing business opportunity to dominate in Australia and to innovate in Australia and then to take it overseas. That's actually not our plan, by the way. Like, our plan, as I said, is to be the number one bank in Australia for under-35s, which would make us a top 10 Australian bank. Like, that's our, that's our mission in life. Is not to expand rapidly overseas and sort of go after growth and do an IPO and all that sort of shit. We've never raised any capital externally, so we're a self-funded business between obviously Bendigo and Ferocia, and we don't have any intention really to, to do that. We have looked at it, it is a good way to grow. We might do it one way, so I don't want— one day, so I don't want to take it off the table. But we're a little bit different than the other digital banks around the world because we're not raised capital, we're not looking to do an IPO, we're not looking at rapid expansion internationally or anything like that. We just want to focus on helping Australians. Like our mission in life is to help Aussies to sort of de-stress and to sort of, you know, help them with anxiety around money and all that sort of stuff. And if we can help people feel more empowered and more in control of their finances and understand their money flow better here in Australia, that would be, you know, a job like totally well done. That's what we're trying to achieve.

Tommy: What is the difference between ING and Up?

Dominic: Oh, there's so many differences. I mean, to me, ING is what I would call a branchless bank. So they're more of a traditional— but we love it. Like, everyone at Ferocia was an ING customer before we built up, right? So I don't want to take anything away from them. And I'd also mention Macquarie because, you know, we're in Melbourne and ING is dominant. ING has a good presence in Sydney, but Macquarie is also very dominant there. And Macquarie is actually a project once upon a time that we were pitching for. One of my mates actually worked at Macquarie and was running their internet banking stuff. So, so, you know, what they've been able to do in in the digital space, both Macquarie and ING, is pretty amazing. They're very, very good and they really bring it to the Big Four and compete with them. But the main difference is that we're digital to the core. So there's hundreds or thousands of people working in those organisations and a lot of their systems and processes are legacy and whatever. Whereas we are fully digital, everything we do is built from the scratch, built from the ground up. And so I think that there is a practical difference in the lower cost base. And in the technical delivery and the cadence, the way that— so I'll give you an example. We had a goal with Bendigo when we worked with them for, like I said, for about 5 years before we started up. And our goal was to get them to be able to do monthly deployments of software to customers. And if you can take software and get it to customers at least once a month, then you start building this infinite feedback loop that just keeps improving and getting better all the time. So that was our goal. Took us about 5 years and we actually got them to over 1 deployment to production for customers a week. Last year, or just a couple years ago now, we were able to deploy 64 times in the year, which means that Bendigo Bank were getting software out to their customers in a much more regular cadence. Now for them, they'd done, I think the number was shy of 20 deployments to customers ever in like their 15-year history, you know what I mean?

Tommy: So what does a deployment look like? An update to a website or a new app download or Yeah, so maybe a new app download and a new feature.

Dominic: I mean, it can scale in complexity. It could be— often one of the things that really frustrates me is when you get a new app upload or download, depending on which way you want to look at it, and all it has in it is performance improvements and bug fixes. Like, I freaking hate that. I really, really hate that. Yeah, but you see that sometimes and it really frustrates. So that is technically a deployment. Anyway, so for Up, what we did is we said we wanted to deploy software to customers every day. In fact, we set ourselves a goal that we wanted to hit 5 production deployments a day. Well, that was our goal. Anyway, we averaged more than, more than 5 at the moment, and we have people having to update the app every time. It's, it's auto magic. You don't even, you don't even know it happens. Yeah, it just happens in the, it just happens in the background. And then what we do is we, we basically rely on the App Store and the Google Play Store for the regular releases releases. So we'll do a release to the App Store and the Google Play. Probably the most frequently any company can do that is weekly cadence, like maybe weekly or fortnightly, just because of the lead time and approval time with the App Store and the Google Play, whatever. It is possible to do it a bit quicker. And you can, you can line up a whole bunch of them in advance. So we run a programme where we test all of our own, we eat our own dog food. So we test all of our own software internally. And so we have versions that we use as staff members, and then we roll it out to Google Google Play and the App Store with Apple. And we do that on a regular basis. So you pretty much get a new app or an updated app every month or every few weeks or whatever. But we deploy software out to our cloud infrastructure more than 5 times a day so that you're always surprising and delighting your customers. And we're always getting better and better. Now, if you compare that to a traditional bank, you know, your ING or your CommBank or whoever, they're getting better at this stuff, this technology stuff nowadays. But just go back a few years and they were doing at best one deployment a year. And so if we're doing 5 a day, there's a huge discrepancy. So now you'll see organisations maybe doing a release a quarter or release a month or something like that. And that's amazing and good luck to them. But for us, you know, we're at more than 5 a day, which is just a huge discrepancy. It just means that we can move faster. So when we announced the, say, the TransferWise partnership, I call it the 15-minute meeting that we had with them. Like, we met them in San Francisco., we're at an Apple conference, and then they, you know, we flew back to Australia and we went up to Sydney and we met up in Sydney and we were chatting with one of their devs and we had one of our devs there and we shook hands and within 15 minutes we had exchanged the API keys so that we could actually integrate our two systems.

Josh: Was it one of your hands? Like, did you sort of some sort of secret handshake with the API key?

Dominic: Yeah, absolutely. But that's the sort of, that's, that's the sort of speed that you to move at if you want to innovate in a technology industry. And in banking, that process would take 15 months or 15 weeks or 15 whatever. So to do it in 15 minutes is the new normal. It's what we actually have to do as a technology company. So when I mentioned those companies before, I just dropped them casually, you know, Uber and Airbnb or Tesla is another good example. These are companies that have sort of come out of a garage or, you know, a few co-founders and they've built their foundation on technology and they've completely disrupted an industry. So we hope, and we see it now, a lot of the big banks are copying us, a lot of the new neo banks are copying us, and we don't care, that's fine. We just want to change the whole industry. And so for us to be moving at that cadence and delivering technology in that way and using technology as the enabler, that sort of technology-led banking, we think that's going to make a real difference for all Australians, like Australian consumers, over the next decade.

Josh: Bank fees. How many bank fee Uh, fees are bullshit.

Dominic: All of them.

Tommy: Well, you know, because I was thinking about this— sorry, go on, Dom.

Dominic: I'll just say it's not bullshit. Like, like, there's only two ways to make money, like, practically speaking. You know, you can make money for charging fees by literally charging the consumer, like, you know, charging people for whatever your service is. And the other thing you can do is make money in banking out of the margin. So if you have deposit products and then you have credit products. If someone gets a home loan and they pay, you know, I'm going to just use round numbers. They pay, these are ludicrous numbers, but if they pay 5% for a home loan and you had a savings account that had 2%, then the difference there is 3%, right? So you're making a margin. So if you can take deposits and then you can deploy them through loans or some other credit products and you can make a margin, then that's how banks traditionally make money. So I just want to say fees aren't bullshit. Fees are a genuine way to make money. But of those two different ways of charging customers directly through fees and then making money out of the money, out of the margin, we tend to favour making money out of the margin. We're very transparent about that. And we like to explain to customers how we do that. But we just try to avoid charging fees where possible. We do have some fees, but we have no traditional fee. There's no onboarding fees. It's completely free to use Up, to try Up. We don't have monthly fees and all that sort of stuff. We have really looked at how we can eliminate all fees. So we got We got rid of international fees. We got rid of foreign exchange fees. We got rid of ATM fees. You know, we try to get rid of all the fees where possible. If you look in the fine print, there's still a few fees. Like if you overdraw your account, for example, we don't offer any credit products. So if you overdraw your account, there's a penalty there to discourage people from overdrawing their account. But yeah, in the future, I'd love it if we had no fees at all. But that just means that we have to build a solid business on the margin side. Because if we're not making any money out of margin and we're not making any money out of fees, we go out of business. And then our multi-decade strategy you just can't work. So yeah, it's not bullshit. It's just that you gotta make money to survive. But we prefer not to have fees where possible. Yeah.

Josh: Yeah.

Tommy: Well, I mean, how many free products are there now? I think I'm more primed to think, okay, if this is free, it's a freemium, you know, first month or whatever it be signing up, how is the business actually surviving at that point?

Josh: But not only that, I guess you look at the Uber examples and it's like you can, get a monopoly over an industry by having low rates and all that sort of thing. But then I guess as a customer, we're becoming more and more wary of, is that a long-term sustainable strategy? Like actually finding out, is the business able to monetize with this? Because if they can't, how is it going to be around in the future?

Tommy: And for you, Dom, at the start, what was the decision on doing the no-fee structure? It's obviously very appealing to customer, but from a business perspective, what's the thinking there?

Dominic: So I think there's a whole bunch of different components to fee. Like, not having a monthly fee and not having sign-on fees or ongoing fees is obviously great for customers, but I'm going to be blunt and say that I think that the digital banks that launch into the market with price only as their differentiator, are going to go bankrupt. Like, they're not going to exist in—

Josh: What's a price only?

Dominic: So if you come and say, I have no fees at all and I have the best rates in the market, so if you put your deposits with us, we'll pay you the highest interest rate. Those, unless they can do some magic, those companies will go out of business. So what we did is we said, we recognise that risk. So what we said is that we never want to be recognised as the cheapest. First of all, it's not our brand. Our brand is the best. We deliver the highest quality, we deliver fun, we deliver engaging, we deliver an experience like no other. So for us, we're sort of, I guess you could say we're more the Apple than we are the Android in that sense, right? Is that it's more a quality premium product that you pay for.

Josh: Are you an Apple fanboy, by the way? I can just say you've got like, what, 10 different boxes?

Dominic: Yeah, a little bit.

Josh: What was your first Apple product?

Dominic: I was actually late to it. So I'll just give you the— I'll come back to Apple, but I'll just give you the finish on the fees, right? Yeah. So no, no, but yeah, That's a really good question. Actually, I'm more of a Tesla fanboy than I am Apple. But I'll come to that too. But I was just going to say that, and so for us, it was like our strategy was let's be competitive in pricing so that we are always amongst the best in terms of the fee structures. So we have some fees, but almost no fees. And then let's have a really strong competitive interest rate, but we're not ever going to have the best rate. Now we have actually almost by fluke had the best rate in the market for deposits. So you put your deposits with Up, at the moment you get 1.8%. When we first launched, it was 2.75%, and that just moves with the market. So at the moment we're in a pandemic, the Reserve Bank have reduced the cash interest rates, the official interest rates to 0.25%. So that means if you're getting 1.85% with us, that's costing us 1.65% to give you 1.85%, right? So we were always conscious that you have to have a viable business. And so the viable business for us is to have a competitive price on both the fee front and the margin front. But actually try to create a business that people are prepared to pay for. So we have the most amazing features and we're the first to do all these cool things. You know, you could— before Up, you couldn't sign up a bank account in Australia in less than 3 minutes. And now there's, I don't know, a dozen banks that you can sign up a bank account in less than 3 minutes. And so we think that that's something that people might not pay for that exact specific example, but people will pay for us to be the innovator and to keep driving forward that, that, that, um, those benefits for consumers. And then if we can add value, so for example, I get letters from customers, usually emails or text messages through Talk to Us. We have this, you know, Talk to Us built into the app where people send us messages. And I get messages from people every single day, and, and our support team send them through to me in, in, in Slack. Um, so that, you know, because they send them to me and they don't go to me, they go to someone in the support team and then they forward them to me. And, and they're basically saying, you've changed my life, like I've reconnected with my money, I'm saving more money than I've ever saved before, I now know where my money's going. I love how you guys identify the merchant. You know, I love having as many savers as I like. I love the emojis. I love the real-time payment. You know, whatever it is, all these things. And I get that feedback all the time. And then the question that I have for people like that is, obviously I'm very complimentary and I send them a hug and I'm really grateful. But I also ask them, would you be prepared to pay for that? Because if the banking system right now is so bad, nearly every bank in Australia charges $6 a month annual fee, a monthly fee, sorry. So that means that you're paying about $100 a year to your bank for what? Like, for bad service and bad customer service and a crappy app? Like, so it doesn't make sense. So the question I always put back to people is, would you be prepared to pay for that? Because we can't do it for free forever. We've got to find ways to make money.

Josh: Like, because I guess that's like with us, with podcasting, it's like, uh, you can have really loyal listeners or customers, whatever you want to call them, but if they're not primed to spend money on it, do you think that there's is there sort of a roadmap in regards to how you get there? Or you, I guess, do you need to provide extra value when, when you turn that tap on?

Dominic: I don't think so. I think we want to keep providing value for free. But what I think is that we monetize through the products that we offer. So I'll give you some examples. So like a home loan, we've never launched a home loan and we don't intend to do it right in the short term, but we intend to do it eventually. But I can tell you that we have tens of thousands of— so we have hundreds of thousands customers now, and we have tens of thousands of customers who are saving up for a home loan, like saving up for their first home. And so we know that because they create a saver and they put a home emoji on it, and then, you know, we see them saving up $10,000, $20,000, $30,000. And so, uh, and so we have a lot of people saving up for an iPad or saving up for a home loan or saving up for a skateboard or saving up for a bike or saving up for a deposit on a car or whatever. And, and, and, and what we'll do is, in the— as, as, as we evolve and as we mature, we'll offer products. So it could be share trading It could be home loans, it could be insurance, it could be all these different products that we'll offer. And we'll make money out of those products. And we'll also make money out of the margin that those products create. So if you're offering a share trading product, then you need deposits, obviously, to invest. If you're offering a home loan, then you need money to lend. And so we can generate margin and revenue out of all those different products. We don't have to generate it out of spending and saving, which is what we do now. Not all of our products at the moment are spending and saving. I just, I remember about that Apple question. So I'll just go back. To that for one second. So it's really interesting for me is that I'm a, you know, an IT guy, you know, from way back, but I was very late to the game. So my recollection of and my relationship with Apple has changed rapidly in the last few years. So when I was a kid, I was at the local primary school and we had one computer that was on a trolley and it was an Apple IIe and they used to, you know, wheel the trolley around and you can book time with it for your classroom. And that was my, exposure when I was a, you know, a young kid, like I guess a tween. That was my exposure to Apple, and I never thought much about it. And then I went through high school and I didn't own a computer, but then my dad bought an Apple IIe at home, and it was really crap. Like, it didn't do anything. I couldn't really just play games on it. Like, I didn't have anything like word processors, or I didn't like programming BASIC or anything like that. So I had this sort of computer at home, but it was like my dad's computer. Computer, and so I wasn't really allowed to touch it. Meanwhile, all of my mates were gamers, or they were hardcore into BBS, the bulletin boards, and they were right into the whole modems and, and the internet and all this stuff. And so it wasn't until I was about 16, and I, me and my brother worked at the local Maccas, and we had a paper round and all this stuff, and we saved up our money and we bought our own computer. And I think we bought it out of the trading post, and, and there was an IBM— it was an IBM clone, it wasn't an IBM, was something else but it wasn't, you know, back then we called them an IBM. It was an IBM 286 and it had computer games, sure, but it also had Encyclopedia Britannica and we also got a modem so we could have dial-up internet. And, you know, for me, I started realising that a computer could be a tool. But meanwhile, you know, some of my mates already had jobs as software programmers. So I was, you know, developers. So I was very late to sort of the computer game and I didn't get into Macs until about 15 years ago., in my last company, where everyone else had, uh, Macs and I had this, uh, crappy old IBM ThinkPad. And I was like, this is weird. Like, why do all the cool kids have these, uh, Macs and what am I doing wrong? Uh, and I used to use a software called CorelDRAW. Uh, it was like graphic design and everyone else was using Illustrator. And I'm like, why do all these designers use Illustrator and have Macs? And I'm here with my IBM ThinkPad using CorelDRAW.

Josh: Like, what the hell's going on? That red button that was like in the middle of the keyboard to track around the mouse. What was that called? Do you remember that?

Dominic: I have no idea. I know exactly what you mean. Yeah. What the hell was that thing? It was like the end of a rubber.

Tommy: Yeah, like a rubber.

Dominic: It was bizarre. It was like a joystick. There were lots of rude names for it that people had. It was a very bizarre tool, but it also had a fingerprint scanner, which was very early days. Like, obviously your MacBook has a fingerprint scanner now, but But back in those days anyway, so then mobile phones, well, I had a Nokia and it was one of those old sort of Nokias, you know, with a couple of games on it. And it was a little, you know, grayscale screen and all this. And then the iPhone was launched. And I think the iPhone being launched, and it was a couple of years later before it got to Australia, the iPhone being launched changed my relationship with Apple because I got a very early iPhone. I think 3G was the first one I had. I think it was the first one launched in Australia. And then I've had an iPhone ever since. And now I have everything Apple. I mean, I've got, you know, Apple Watch, I've got HomePod, I've got at the moment, I've got 4 laptops. I don't know why I have 4 laptops, actually 5 if you count the one behind me. I just have all this like crazy Apple stuff everywhere. And I don't know how many iPads I have, but I just like, I lost a couple of iPads on airplanes. Like you take your iPad on the aeroplane and I just left it. I forgot it in the bag.

Tommy: He's not even follow up to see if they've got it. He's just like done.

Dominic: No, well then Qantas got in touch and they had my name in it or someone found out it was mine or I did find my iPhone or whatever it was. Anyway, so now I have, I don't know, 3 iPads or something, but I love to keep up with like the latest things. And so for me, that relationship was my last sort of business before Ferocia. And I was also a partner with Tomo. My other business partner actually was Marty Howell and he was the founder of realestate.com.au. And so Marty was really into tech. Like he— you would, you would come into the office in the morning and you would find Marty and he'd fallen asleep under his desk, um, like writing code. And this is a guy that sold, sold, uh, you know, his, his real estate company. He was, he was a CEO there for, I don't know, 13 years or whatever, and then he sold that company and, you know, for hundreds of millions, and he was still writing code and he had all the latest gadgets and everything. So, so Marty had a big influence on me in terms of, um, just, you know, having the latest gadgets and everything. And then a few years later I heard about this company Tesla and I heard about these electric cars and everything. I was like, oh my God, this Elon Musk guy is like crazy. And so I had started getting into Tesla. So I would say in the last 5 years, I've got very, very heavily into Apple and Tesla and other technologies like that to the point where I now back over 50 Kickstarters and I don't know, over 20 different companies like startups and stuff around the world. All like doing technology stuff. And it doesn't have to be anything to do with fintech. A lot of them are fintech, but also a lot of them are doing crazy different things. Like I've got this company in Spain who hand-carve things out of desiccated wood. Sounds really crazy, right? But they sell it, they sell those luxury men's goods in Harrods and other places like that. And they make colognes in Italy and they made the world's first cologne for men. That you can mix and match different flavours or whatever it is. And, you know, I met these guys through Kickstarter or something, you know, like it's just amazing.

Tommy: Why would you invest in a company, Dom? What's the drawcard?

Dominic: For me, it's about people and helping those people. Like if I see something that I think is a reasonably interesting idea, but it's the passion that they have. So these guys, for example, that I met, and it might have been not Kickstarter, it might have been another platform like AngelList or Seedrs or something, I can't remember. But these guys, you could just— the passion was oozing out of the screen. Like, you could feel the passion that they had. And they told me that they had come across this farmer in the UK and he was excavating his land. And when he was excavating, they found a historical site. And in the historical site was old trees. And one of the trees was a 5,000-year-old tree. And they bought that wood from that farmer. And then they started carving these luxury goods out of it and everything. And the way that they would talk about it, they basically engrave the latitude and longitude on the bottom of the things that they carve out. And then they sell it for like £500 or something, you know, crazy markup. And so when they explained all that to me, I thought, these guys are crazy, right? But when they explained it to me, the passion that they had for excellence, it was like, it wasn't technology. It was more to do with their hands and craft. And now they do leather goods and other things, but they explained to me that they just wanted to build the best shaving bowl in the entire world.. And that was something that interests me. So the people and the passion is more interesting than the idea, I guess.

Tommy: Well, ideas are a dime a dozen. It's— is it about seeing, like, even from your experience on, you know, pre up to now in the middle of something that's caught momentum and in terms of an idea, what is— what are the most important elements of the idea? Because it is still important to some degree.

Dominic: Yeah, it has to be commercial, right? Like a lot of people have ideas that are good fun, but they can never make money. So we just spent a bit of time talking about how do you make money from a bank, right? You can't launch a bank and raise a couple hundred million dollars and then go about and then run out of money and just disappear. Well, that would be silly. It's the same in any business, is it's got to have the commercial aspects as well as be fun, as well as be a good idea, right? It's got to be unique or innovative or different.. And even if it's not like some of the mundane things, like Amazon is obviously one of the biggest companies in the world now. And, you know, really it was a bookstore, right? Like, I mean, so, so there were lots of bookstores. So, so what makes them any different? I mean, they were able to nail the supply chain and then they were later on able to nail the technology. And I think that if you can find a niche within any business, even if it's not completely unique and you can deliver excellence, then you just have to have a way to monetize it. So, so I think that that is an important ingredient. So all the enthusiasm and entrepreneurship and confidence and curiosity and all those things we've talked about are really awesome. And that's what I back. I back people. But also the idea has to be a reasonably good one. And then also it has to be able to be commercialized. You have to be able to make money out of it because you've got to make money to survive. So yeah, I think for me it's been looking at the people that are involved, the idea, the commercialization, and then making a determination is, can I have an impact? Can I make any difference? And it doesn't always have to be a business. Can I just say this? I'll just pivot a little bit and say that, you know, we got hit with this pandemic. Everybody's working from home. Everybody at Ferocia is working on app remotely. And we're in a privileged position to be able to do that because we're all technology engineers and we all work on computers every day. So actually working from home, as long as you have a good internet connection, it's not that difficult, right? So for us to do that transition was fine. But what we found is that a lot of our customers were struggling and a lot of them were losing their jobs. A lot of them couldn't work from home. A lot of them were working in essential services and so on. So we actually launched a thing we call Upskill, which is a way for us to actually share our knowledge and experience and bring other experts from other industries in. And so we ran a mental health one and then we ran a financial literacy one. And that was not to make money. There was no commercial aspect at all. It was all about helping other people and bringing what we— so we have a platform and that platform is up. And then with hundreds of thousands of people that are involved in it. And we said, let's open it up to anybody. You don't have to be an Up customer. Anybody could participate, but let's get experts from other industries and bring them in and then help people learn something. So financial literacy is relevant to what we do, but mental health was just relevant to everybody who was struggling working from home. And so we had thousands of people engage in those live sessions and have had subsequently, they're on YouTube and everything. So now we had it. And to me, that's the essence when you ask that question is what makes me interested in a good idea or good investment is how impactful it is for other people. And so that one is an example of a non-commercial idea, but it's very impactful in the way that it can actually help people. And I think that they're the sort of ideas that we don't just back internally here at Up, but generally me as a person, I like to back those sort of ideas because I think that making a contribution to society or making a contribution to other people and sharing knowledge or helping other people improve other people's lives is something that I'm very passionate about.

Josh: I need to go and sign up for UP now. I feel like— I love a bit of hype. I know that it's— there's more than hype, but you've definitely sold it. On the monetization thing, we actually worked out a way of making money through a megaphone. And I have forgotten in the first 5 minutes, we did a deal with Ben Fordham. Where he has sponsored the entire week to advertise his new breakfast radio show. And so I just need to— sorry, Dom, this is probably— it's probably a little bit unprofessional. Thank you. I'm just gonna have to do it. I'm just gonna have to do the ad now with you here. Just, just stand by.

Tommy: Ever listen to 2GB, Dom?

Dominic: No, not personally.

Josh: Uh, okay, okay, that doesn't matter, Dom, because it's about the megaphone now. The Daily Talk Show would like to thank Ben Fordham for sponsoring the megaphone. He has his new breakfast show starting 5:30 AM Monday to Friday, 2GB. You can listen in Sydney on The Dial or stream on your favourite radio streaming app. Thank you.

Tommy: There we go. That's how you monetize the podcast. Mate, I don't want to offer up the deal, but it is at $255 now if you want to purchase it.

Josh: If Up wants to sponsor the megaphone, $500, you get a corporate video. Yeah, you do a nice employer brand if you're looking at hiring anything like that.

Tommy: It's a scaling sponsorship, so it goes up in $5 increments.

Josh: I thought you might be impressed by that. Yeah, that's awesome. Thanks, Dom. I would love to get you back on too, because I feel like I've got a bunch of other questions. I've got really dumb ones that I want to run past you. Can we have a— should we do a two— have you got 2 minutes to do a quickfire?

Tommy: So when I, when I take a photo or when I enter in my driver's licence details, how's it actually verifying through the Up app?

Dominic: Yeah, I mean, it's part of the secret sauce is how we do it. So I mentioned earlier that, that Up was the first bank in Australia where you could literally sign up an account instantly and then be able to spend your money. And there's 2 remaining or 3 main ingredients to make that possible. One is the verification of ID. We were able to leverage a lot of the relationships that Bendigo already had, but we had to rebuild from the sort of the ground up a digital authentication experience so that you could sign up a bank account and meet all the regulatory requirements for know your customer and anti-money laundering and all that sort of stuff. So that was one part of it. Another part of it was this first that we did with Apple, which, and then later on Google. Which actually meant that we could provision a digital wallet while your account is still inactive. So when a bank creates an account for you, normally they send you a card and that card goes through the mail. And when it's going through the mail, it's inactive in case someone steals your mail and pinches your card, right? So we had to build some technology that would allow us— and we work with MasterCard and another company called Cuscal and Apple and all this stuff— to be able to actually provision that card for you. And then the third piece for us was to be able to get the money in. So you need to actually get money in using the NPP in real time because you already had your money somewhere else. So to be able to sign up an account and verify your ID in literally 30 seconds or whatever, and then be able to provision a digital wallet so that you'd be able to spend your money and then be able to transfer that money in using the NPP. That were the 3 sort of secret ingredients that we had to bring together into one awesome signup experience. And the average time to sign up for an UpBank account is 2 minutes and 12 seconds. So you can download the app from the App Store, you can sign up an account, we take care of all that detail for you. And being the first bank in Australia to do those 3 different things meant that we were able to actually give you that experience. So in terms of what we do with it, when the data comes in, it goes off to credit service providers. And there's a couple of really famous Australian ones. So VIX is a green ID, VIX Verify and Equifax are the sort are the two biggest players. There's lots of other ones as well. In fact, there's some great fintech startup called Franki, and they offer those services in an aggregated sense to a whole bunch of other banks now. We don't use them, but I know the founder there, and they're doing a really great job at delivering that technology. So, so that technology— sorry, that data comes into the technology, into the platform, and then it gets sent off to third parties for verification and validation, and it's basically checked against government databases. Databases. And I can't really say more about the details because it goes to the security of it. But, but, you know, it's checked against government information. So if you have a Medicare card, a driver's license, or a passport, it's basically cross-checked by these government databases across all of your other life interactions with the government and private companies. And then that's fed back to us. And we basically get some flags that say you're a bad citizen or you're a good citizen. It tells us whether or not your account has been compromised, you know, whether your data, maybe your driver's licence licence was stolen when your wallet was stolen, or maybe your personal details like your date of birth and your address have been stolen when some other company has had a data breach. And so all of that information then becomes relevant as to whether or not we're able to offer you a bank account.

Josh: Tom, very quickly, is there a limit to the amount of cash you can put in a bank account? Like, do you guys have like a limit where it's like, if I had $1 billion, could I actually put $1 billion into my account right now?

Dominic: That's a very good question. I don't think there's a limit that we publish. Like, it would probably be in the billions because it would be so many digits. But there probably is a practical limit. I could get back to you on that one. We don't have a minimum. You have to put a dollar in to be able to activate your account, to be able to make use of it. But if you leave your account empty, then it'll sit empty. In terms of the total amount, we only pay the bonus interest up to a certain certain cap, you know, so we cap the amount that you can earn interest on. But I don't think there's a cap to the actual amount that you can put in there. So yeah, if you had a billion dollars and you wanted to put it in.

Josh: What's interesting is—

Tommy: Expect some big transfers to Sava College.

Josh: If you think about the fraud, all the fraud stuff's really interesting. Like we tried to get some Apple products and Tommy and I got them at the same time and Latitude thought that we were conning them. They thought that we were the same person. That's hilarious. And so we had to try and explain that we're two individuals just both trying to get iMacs. But you know, It's funny, the whole fraud type of thing, you know.

Tommy: It's not funny if you get frauded.

Dominic: Yeah, well, it's quite curious because there's also things like third-party fraud. So I'll give you an example. You buy a t-shirt, right, or you buy a pair of shoes, and you do that online, and then you put all your data in— your payment data, your address, and whatever else you put in— and then later on that gets hacked or gets compromised, and you don't even know. You know, that's called third-party fraud. Like, you don't even know that your data's been compromised, and someone's out there on the dark web or whatever, you know, using your data and impersonating you. And so then when you go and try and do something with a financial institution or you go and try and do something with the government, you get a sort of a red flag and they say, oh, hang on, this person's sort of dodgy. And you're not dodgy at all. It's just that some other company that you've dealt with— but yeah, some other companies had a breach and then that breach actually impacts your ability to do things. So I think that in the digital world, The interlinking of you and your sort of profile across social media, across payment services like Stripe and Uber and all that sort of stuff. And then, you know, financial services and government, the interconnection of all of that data is actually providing whole new ways to catch the criminals. But it's also having an impact on our customer experience because, you know, someone like you just mentioned can reach out to you and say, oh, hang on a second and block your transaction. And we do it too. We block people's transactions sometimes when it seems like something dodgy is going on. And sometimes there's nothing dodgy at all. And it's just, you know, it's just created some red flags based on some algorithms or something like that.

Tommy: One last quickfire. Caitlin wants to know, when can we buy a Perk Up mug or a Keep Cup? Keep Up Cup.

Dominic: Caitlin, I know Caitlin well. She can reach out to me and I'll be happy to send her one. You don't have to pay for it. Yeah, look, I've got one in the background. You might be able to see it over there. There it is. Yeah, yeah, a lightsaber as well. Yeah, yeah, um, yeah, no, no, so it actually originated is that we did some socials and we had, uh, the Perk Up mug, um, and people thought it was great. We have this thing where you can buy a coffee and we refund people's, uh, coffee, so you get a free coffee basically, and it happens instantly, right? What about—

Josh: it sounds really cool— because I've, I've known to get a $7 large, um, strong mocha.

Dominic: Yeah, what's the price? Well, we're We'll probably do it for you, but we kept it at $5. So it had to be less than $5. But anyway, and then people were wondering whether or not the Perk Up Mug was real and it wasn't real at the time. It was just a digital mug, which would spin around inside the app when you got your free coffee. But everyone loved it so much that we literally went out and manufactured these mugs now and we give them away and people can't believe it. So I think manifesting things things physically that you've only ever known digitally, it's just amazing. Like, it brings a whole new sort of tangibility and feeling to, uh, to the brand. Um, and, and people like Caitlin reach out all the time and go, I'd love to, I'd love to get a Perk Up mug. And yeah, if Caitlin wants to reach out, we literally give me your address and we'll send you one.

Josh: Uh, I mean, that's cool. I mean, it is. But also on the admin side, I'm dealing with some mug issues at the moment, trying to source mugs. Do you have a supply, a good supplier? And what's the sort of the cost per unit?

Tommy: Can we come on the back end of your order?

Josh: Yeah, what's the cost per unit, do you know?

Dominic: No, no, it's a very good question. Now let me just say this. I used to run a record label. It was one of my previous businesses. And so we did a lot of merch manufacturing. We used to tour around Australia and do a lot of gigs. And so we sold a lot of merch and stuff. And that company that used to do it, the guy that we used to work with, Brian, it's now 20 years later and he is the guy that now makes our Perk Up mugs.

Josh: Really?

Tommy: Great.

Dominic: So that's Brian's business.

Josh: Do you reveal the company name or like, or is it, do you keep your suppliers close? Can you tell us?

Dominic: No, no, I'll tell you off air, but I think he's, he's changed the name. It used to be called Modern, but now I think his company's called Wow or Yao or something. I'll send it to you guys.

Josh: I'll just buy mugs and I'm not getting much. No, no, no, he does it.

Dominic: He does everything. Yeah, he does everything. Great. Yeah, I love it.

Josh: Awesome.

Dominic: Yeah. But for me, that's that people connection, you know, is that he used to do a really good job for us 20 years ago, and I introduced him to our crew at Ferocia. And yeah, he now makes for us pins, mugs, I don't know, t-shirts, whatever we need. He's the man. Yeah.

Josh: Okay, great. Yeah, perfect. Maybe he'll be a Megaphone sponsor one day too. Anyway, Don, thanks so much.

Tommy: Thanks, buddy.

Josh: Yeah, we'll get you on again soon.

Dominic: I'll be happy to. Thanks for having me.

Josh: It's a daily talk show. We'll see you tomorrow, guys. Have a good one.

Tommy: See you guys.