Kopi Time E150 - Piyush Gupta on the Present and Future of Banking

So let's start by looking back. Uh, major global banks today are definitely more capitalized than they were 15 years ago, and they're definitely much more digital. How else are they different?

The first, I think we took enormously long to build these safety pillars, and frankly, even today, 15 years later, the work is not done because the regulators keep tweaking. Um, they call it different names. Some people call it Basel 3.5, some call it Basel 4, some call it the Basel Endgame, some call it the Swiss Finish, but in every jurisdiction, regulators are still going back and revisiting

what they did. In some cases trying to lighten the rules, some cases trying to, uh, add to the rules, and it just seems to me that 15 years is a long time to try and get to where you need to, um, so I think we took too long and that um. Passage of time created a degree of uncertainty in the system. The second thing is we didn't solve everything. Liquidity in

particular created some consequential challenges as well. Um, holdings of treasuries, for example, you know, the banks started running shy of doing some of that, so they started creating these saw effects in the treasury markets. We saw through the US regional bank crisis that many of the smaller banks did not actually embrace some of the liquidity rules completely.

So not only did we take a long time getting to where we are, it wasn't completely consummate as well, and we left some gaps in the process. I think we could have done better as an industry. I'm. Reminded of the Asian financial crisis, so post '98, the Asian regulators and the Asian system also responded to the crisis in pretty much the same way. They added up capital requirements, they rethought some of the liquidity requirements. They became a lot more intrusive in their supervision, but they

did it in a few years. They did it with a lot less song, dance and drama. And by now the Asian banks have proven over the subsequent 20 years that they became relatively strong uh uh in that period of time. So now when I say that this is a challenge, what is the implication of that been and that is bearing on how our banks different. The implication of that has been that the banks in general have won a battle which is around capital liquidity and solving for the old crisis.

But I do think the banking system has not done as well as it could have in terms of the war, which is thinking about the shape and nature of banking in the future. Um, today, most banks have embraced digital, but the reality is that as late as 2016, 2017, I used to reflect on the fact that there are only a couple of banks in the world who are as focused as DBS was on the digitization agenda. Uh, in fact, when I talked about it at many global forums, it was

so interesting that banks were still bothered about Basel. Nobody was talking technology or digital. So banks are not as advanced in the digital agenda as they should have been. Um, a lot of banks have great apps, but if you look at the underlying architecture of technology, uh, have banks shifted to, um, microservices, API based, cloud native technology? Very few have even now, and that says something that banks are still not as far advanced as they should be.

Um, in some ways I was actually quite surprised in the last few months. The one country which has really made huge, uh, leaps in that regard is China, right? Uh, we realized that through the COVID period when, you know, nobody is watching, the Chinese leapfrogged in terms of their transition to the new technology architecture, and I find today that some of them have made even more progress than

DBS has. But when we compare ourselves with many of the Western banks, I think we're still 57 years ahead. So long way to say safer banks, but might not have made as much progress on technology and digitization as you would have expected them to or would have liked them to.

They should be turned into utilities. But looking at the bank's performance, say the last half a decade, they've done very well with the interest rate cycle and so on. So that, that portrayal of banks being the villain, being the problem, not the solution around 809, was that overstated?

So that is one thing of our own making. And if you look at the industry, this big step up in competition only happened in the 90s and 2000s, so it was a focused period of time. The second thing we did wrong is we lost sight of the purpose of a bank, which is the fundamental

of doing real things for real people. So to an extent, some of our product selection and some of the things that the industry was doing uh started looking like it was self-serving as opposed to actually having a hand in furthering the interests of the real economy or individual citizens. So I think some of it was, um, you know, um, coming as a consequence.

You contrast with Asia and even though the Asian banks got hammered in '98, by that Asia has worked as Asia Inc. The banks play a more constructive role along with the rest of society and therefore you never saw the same degree of angst about banks and banking. So I mean, the point is too, the reason why there was so much political outrage and therefore so much regulatory overhead was because of that. People thought that the banks and bankers were the villains of the piece.

Uh, in some ways, even now, 15 years on, there pockets of the universe where this has not disappeared. There's some places where it has, but in some places you can still see this and the underlying nature of the dialogue and the nature of regulation, so it hasn't entirely gone.

space has been ceded to non-bank finance companies. So what's your sense of the banking, the unbanked dynamic over the last 15 years?

data were the banks in the credit card systems. And so by, you know, 2010, 2020 to figure that banks don't have the right data, don't have the right data lakes, don't have the right data protocols, uh that's telling. But so part of the answer isn't that the banks just did not do as much as they could have. But the second part of the answer is I don't think it's across the board. It depends on the region

of the world. I will tell you that in India, the largest outreach to the unbank has been the State Bank of India. The Prime Minister Jandar Najar now with 300 million new accounts is all State Bank of India, and they do it all digitally on a mobile phone, and the unsecured lending on Euro is all on a mobile phone. Uh, in Indonesia, the largest amount of unbanked outreach growth is BRI. And they still continue to be the largest footfall and

footprint and they're adding customers at scale in China. The policy banks, including Agature Bank of China, etc. are still doing a lot of this. So in many countries, the state, the, the, the banking, the the treasure banking sector is indeed leaning in. Now, to the extent that, you know, they're not doing as much and they haven't done, uh, new stuff like in Alibaba did or some of the new Fintechs did.

Uh, that links back to my first comment. Some of the fintechs were more advanced about use of data and about use of ecosystems where they were able to garner some of that data. My views in the future, it doesn't matter whether you're a traditional bank or you're a FinTech.

It really matters how much progress you've made in terms of thinking about data and analytics, how you rethought your credit underwriting process, how you rethought your portfolio management process, and then you could be an e-commerce company, a telco or Fintech or a bank. If you cracked that puzzle and you know how to be where the customers are, you will win many of these games.

Of course they will. The nature of banking is that you intermediate time and you intermediate risk, and I don't think that's going to change, uh. Would you believe that only banks have the risk, the other fintechs and other people who are intermediating finance will

never have risk. I refuse to believe that either. So if you look at the history of the last 5 years, you could argue that the regional banks or Credit Suisse was one set of problems, but I could equally name to you half a dozen new fintech companies, token companies, tech companies, you know, etc. etc. who also had different kinds of problems.

Uh, so the challenge is quite fundamentally this that when you have provided the capital use the capital, somebody sitting in the middle, intermediating intermediating risk and time, no matter how smart you are and no matter how forward looking you are, you will wind up from time to time

stubbing your toes. To me, the analogy is, you know, any country, even though you say you have a great police force and you have a great legal system and judiciary, you name me one country that doesn't have crime. This is like trying to argue that if you do your job really well, there should be no crime in the country, and that can never be.

I never saw that in Asia. Um, right from, you know, the 9 when I first took on my job, by and large Asian regulators have been constructive in dialogue. They've been forward looking. They've tried to keep a developmental hat along with their regulatory hat, and even in Asia, obviously, you know, it changes a little bit in degree depending on which country you're in. But broadly speaking, you've not had the same degree of antagonistic engagement as you've had in several countries in the West.

Now even in the West I think the dialogue is beginning to change a little bit in the last few years um as uh more and more regulators are beginning to see the world is progressing in a direction of a tokenized economy, new ways of making payments, etc. and they realize they have to engage the private sector more constructively and so it's beginning to happen, uh, but again I said that it's not entirely changed yet.

Uh, the second thing about um the China situation is that, um, a large part of the credit in the system, um, is still benefited by some form of state support and therefore, whereas in the US system, by and large, you know, all the rocks show up as soon as the tide starts receding in the China system all the rocks don't show up immediately.

So it could well be that you know some things are turned out 1015, 20 years in any other environment you would, you know, call them credit losses but uh in, in more supportive environments you can just term out of credit so maybe there's some of that um going on as well. um, however, even if you account for all that, um, the fact is that the total credit losses in China have been lower than one would expect.

Even if you take the real estate sector, where you should expect to see the biggest damage, there has been some. Um, but not so much in the bank books. There's been some in the bank books. A lot of it is in the financial markets, the bond space, bondholders, etc. So one, this speaks to the fact that the banking system has changed a bit. So banks are holding less

of the risky assets. The financial markets are holding uh more of the risky assets, and so there's been a fundamental shift in the nature of the banking system, um, as well. I should have mentioned that when you asked about how the banks changed. See, in truth I sometimes reflect that. It's not that financial sector risk um has disappeared, uh but the risk in the formal regulated banking sector is lower because it's been squeezed out and so some of, some of the risk is just shifted out. uh, why

is private credit such a big market today? right? It's a big market because banks are refusing to put on that kind of credit.30 years ago, banks would have been doing structuring and putting on the credit, the banks don't. Uh, project finance. So large nature of the financing has become prohibitive for banks to do and they get squeezed out to the non-bank world, right? And therefore, when the losses are, are seen also, it's also proportionate. You see less of it in the banking sector.

And perhaps more of it in the nonbank world.

Am I uncomfortable with it? See, the argument that some would make, you know, Macro and a reporter makes it very compellingly that people who fund those private side sectors do it with their eyes open and therefore there's better duration match. People come in recognizing that they're going to be in there for 678 years. So when private credit, private equity puts money for 678 years, it is match funded, right. Whereas in the regulated sector, the household savers come in

with short term expectations. They put money into savings accounts and therefore need to withdraw money in a in a hurry. And therefore, when the bank takes on the same nature of the 678 years, this is putting on duration gap. I think I have some sympathy for that argument that when people are going into a fund with their eyes open saying it's a 6 year fund or a 7 year fund or a 7 + 1 + 1, by nature you've shifted the risk to the investor depositor.

Now, having said that, I think that on paper the investors deemed to understand that risk. In reality, I found that most investors, when, um, you know, things get bad, turn around and say we don't know, and they wind up standing in front of the same doors whether there's the regulator or the politician or the bank saying hey we did not know we were misled and we need somebody to make us go right. So this happened with Lehman mini bonds in the '09 crisis.

It happened to a large extent in China with the P2P lending crisis. So I've seen this repeatedly that people think that the risk is better understood, but actually it's never better understood. And therefore by squeezing the discount and leaving it there, I do think that the fair amount of residual risk, which is not adequately thought through or accounted for.

you know, 18% ROE doesn't come from nowhere. So a lot of it comes, I think we hold our own against any pure play, uh, digital bank today, um, but you know, it's not across the board. So I think the thing to look for is those people who can embrace digital and those who can't. One of the advantages that traditional banks have is, um, obviously a lot an install customer base and a lot

of inertia in our industry. Um, the switch away from our industry market share moves gly, and they take a long, long period of time, much longer than, uh, brick and mortar e-commerce versus e-commerce. And I think that's a lot to do with people's attitude to money and the sense of security that they need, which comes from a physical brick and mortar presence that they can see.

So even though the banking sector started getting unbundled and digital started happening about 2010, so it's been 15 years, if you look at the market shares of any new banks anywhere in the world, they're less than 1%, 1, 2%, right? So after 15 years, you hardly see market share shifts, including in country where you say the traditional banks have

lost it, they're not doing very much. You look at the UK with some of the first new banks were there like Starling, Monzo, A. And then you could argue that a lot of the high street banks were on the back foot, but you fast forward 1015 years, you know, the high street banks are still high street banks. So the, the old banks have benefited by an installed customer base and tremendous degree of inertia, uh, in the system. Uh, new banks, um, interestingly, the big advantage is obviously

a low cost structure, right? They can focus on what you want to do, but by now the disadvantage because they tend to be relatively narrow in the product offering. The very few new banks which are full purpose, large scale full purpose, most tend to be either in the wealth space or in the lending space or in a microcosm of the system, and that's one of the reasons why they find it hard to get incremental share very quickly. People like to be able to go to a full service offering.

Uh, the other thing I found that new banks, traditionally, my view was that the cost of customer acquisition would be much lower because they acquire customers digitally. Uh, in reality, I found that there's not that much difference between uh traditional acquisition model.

Maybe a couple of percentage points, but after you wind up building your technology systems, your marketing, uh, systems, and start paying Facebook, Google or YouTube for the uh uh marketing dollar and then you multiply it by the click through rate, it's not that advantages. There is some but not huge.

So, um, the best performing new banks to me are the ones who have the capacity to leverage some other ecosystem because if you already have hundreds of millions of customers coming to you through another ecosystem, then the marginal cost of converting the customer to a banking relationship is lower, that's for sure. But there are not that many companies which have a large and robust ecosystem which they can then market banking services on the back of.

So long way to answer your question. I think new banks do have some advantages, but I think the advantages are often overstated, and um I think as long as the traditional banks are able to embrace both digital technology and data in a meaningful way, by and large I think they will hold their own.

Um, if you look at the biggest growth in the wealth industry in the last 10 years across the board, not just the high rate, but into this thing, is the traditional banks which have mobbed up most of it. So yes, you know, the endaas and stash away, etc. they're credible, they're good offerings, but the ability to scale is still, um, um, limited. OK,

Then yes, I think the market shifts will be faster, but most banks are doing enough, certainly in Singapore, most banks are doing enough to be able to hold their own. I

So it is logical to assume that in the world most people will look for new forms of value and changing value and already in the last 10 years, certainly in our part of the world. Everybody pays on a mobile phone and everybody pays by QR code, right? And so obviously you've seen that evolution. I think there are 2 or 3 other reasons why a tokenized world where tokenized assets or tokenized money will

be prevalent. Um, one is that the minute you tokenize, you can fractionalize, so you can go down to 0.0001 of anything, which means you can distribute more widely. A lot more people can participate, so fratalization is quite important. The second thing with the tokenization is that you can program. So today, if I give you some money, $10 I give you the money, but in a tokenized value this thing, I can program saying you will get this $10 provided 123456 things happen.

So today conditionality moves separately from value. You can actually layer in conditionality into value that has immense, immense potential and power, right? When you can layer conditionality into value, then you're not looking at two streams, an information stream and a value stream. You marry the information stream and the value steam, and then you put conditionality on top of that. A third thing tokenization does is lets you do atomic settlement in real time 24/7 atomic settlement.

Whether it's PVP DVP, you know, uh, and exchange trade versus uh foreign currency trade, it can all be done in real time. So there's a lot of value that technology brings that can take out inefficiency in the current clearing settlement system processes. So my general view is that tokenize money and tokenize value, in fact, tokenize every kind of asset form will happen. It happened over time. Now that's different from um.

Money in the sense of will it will it replace fiat currency right so I do think it's a token, but I do think that eventually certainly in our construct for the next few years, um, money will still be feared in the sense it'll be state backed. I think private money and the world has experimented with private money in the past. In fact, it, you know, in the 19th century, there are a lot of issues

of private money. It has all of the weaknesses that we've seen historically with private money, um, that's compounded by the fact that today the Westphalians and the nation state means that if you're running a government, you want to control monetary supply, you want to control monetary policy. Why would you let abdicate the control of the monetary system to some private player, right?

So one, the inherent weaknesses in private money. Second, nation states won't let private money succeed because it undermines the capacity to function as a government, as a nation state. So I don't think you'll see private money, you know, privately issued money, um, and so it could be a store of value, but as a medium of exchange and a unit of account, I don't see that happening, uh, anytime soon. What store of exchange, store of value, yes, of course.

There is about $12 trillion of gold in the world. There's some 4 or $5 trillion of Bitcoin or crypto coin in the world. Already's 40% of the total value of gold. So the minute you have that stock of demand and supply, there's a market. And the minute there's a market, people will use it to store value. So I do think it will continue to be in that form. Um, going back to this, so if I say private money won't exist, but tokenize will exist, what does that mean?

That means I do think you will get tokenized money but linked to the current feared banking system, and that by and large can happen through tokenized deposits or central bank digital currencies. I think central bank digital currencies will occur, but mostly in the wholesale space because there's a real problem to solve, which is what the multi currencies have the same dollar, the sterling, the US dollar, we never got around to

a single global currency. If you can use a central bank digital currency and an exchange process to get around this multi currency thing, you can get all the benefits I talked about instant settlement, more money with this thing. So I do think there's a problem to solve, and you will see that. There are several experiments going on right now, but eventually I think you'll see some kind of wholesale CBDC with a clearing house which will work.

In the retail CBDC, I'm less certain because to me the detailed CBDC, if you have a very good efficient payment system in the country, instant payment, QR code based like our pay now, pay you can pay at point of sale, it's not clear to me what problem the retail CBDC is really solving. Um, and actually it winds up creating incremental challenges because the minute you go to retail CBDC then you have

two choices. Does the central bank issue the retail CBDC and open up accounts for all the citizens in the country with the central bank. Now if you do that, you undermine your current banking system. Uh, more than that, you take on the onus for credit creation, and no central bank wants to take on the onus for credit creation. So there's some challenges with the retail CBDC. You could do an intermediate CDC. You don't go directly

to the consumer. You go through the banking system, but then that's like a tokenized deposit, you figure. So my own view is that I think the prevalent form of tokenization will be tokenized deposits. So you have a deposit, but you tokenize it, then you get all the benefits of programmability, atomic settlement, etc. etc. without actually bastardizing the current fiat currency system. I think that's where you get to. You are especially about stablecoins.

The thing with stablecoins is that um they actually don't function to serve anything that a tokenized deposit does except one thing, they can be privately issued outside of the regulated banking system. So somebody that a coin base, etc. can say, OK, I'm creating a reserve against a bunch of assets. I'm going to issue a stable coin against it. Now that flies in the face of my first thing. Why would nation states let you do that easily.

And therefore, if you look at BI has published a paper recently, I remember, comparing a tokenized deposit in a stablecoin, and obviously argued that the tokenized deposit is a much better way to approach all the benefits you want as opposed to stablecoin which is privately issued. Also, the fact that stablecoins, some of the stablecoins, you know, as you saw, which were linked not to a reserve, but linked to an algorithmic balancing, uh, ran into trouble.

So that obviously took some of the sheen of the algorithmic rebalanced stablecoins. Um, when it comes to stablecoin back reserve, they will exist, uh, but then you get to the question of how, how often do you audit the reserve? How often do you make sure the reserve exists and operated away? How do you make sure that all the other controls are there?

So for my money, I would argue that as long as again the traditional banking system leans into tokenizing deposits and availing of the benefits of the digital uh asset universe. I think that will be the game to back. If the banks don't do that and you know and they leave a big vacuum, then yes, private players will come in and try to disintermediate that inefficiency through other forms of

But after a while, because it's privately issued incentives get misaligned and you want to issue a little more with a little less copper and erode the value and then the trust collapses, whereas if you have state backing that theoretically at least, you know, not necessarily on the table.

who gives you greater trust, greater efficiency. So you could see situations of this sort, but I'm talking about in general if you assume that you have a well functioning government and which is supported by the people. I think it's hard to displace that.

Um, one simple example, we made payments instant and what happens with that is that you know you do something, the money leaves the bank instantly, and if 10 minutes later, 20 minutes later you had a second thought, you had an afterthought, you suddenly figure maybe you got scammed. There's no stopping it's all gone. It's like free flow, but when you look at the reverse and say, OK, so should we therefore. Uh, building so much friction to them that you don't

get the efficiency and speed. People don't like that either. There's a lot of value from instant, right? So it's a hard question to answer, you know, where do you draw the line? What we're trying to do these days is. Um, let most transactions proceed frictionless, but use AI and data to pop up the ones which look like there might be a challenge, and then see if we can put some friction only in those. How successful we'll be with that, uh, demarcation is anybody's guess.

can't get in. So and by and large I think that's true for a lot of the financial system. I'm not sure equally to all other infrastructure providers, though informed governments like Singapore have actually designated various other critical infrastructure providers and pushed them to get the same level of safety safeguards. Uh, but on top of peripheral defense, the other thing that we've done is relied a lot on, um, building up strength within, you know, we call it inside is

the outside. You assume somebody is inside because sooner or later we leave a window unguarded and somebody will get in. So how do you protect if somebody's inside? And there are techniques for that as well. Microsegmentation is one. So if you come in, you only hit a particular segment, you can't go everywhere else. Uh anomaly detection is another.

We use a whole bunch of algorithms and AI to detect, hey, something's happening which is not consistent with what you would expect, so you can quarantine and shut down very, very quickly. Um, but the truth, time is, you know, the bad guys have the same technology too sometimes smarter than you, and they continue to proceed at a rapid pace. And so you're constantly hoping that you can keep up with them, if not stay ahead of them. One of my current

big nightmares is obviously quantum. And so with the amount of um technology power available with quantum and the ability to crunch through everything and unravel everybody's keys instantly. Uh, that's a nightmare, uh, possibility. Our hope is that quantum will guard against quantum, right? And so we're trying to work on that as well, uh, but, uh, you know, it, it,

it could be challenging. One of the things is you know in Singapore that we did in the last year or two as an industry is this whole thing called money lock or, um, you know, we call a DBS vault. So even though all your accounts, etc. are digitally available, we encourage you to take some of it and park it in a section of the account where digital is not, does not work. So at least you have a corpus of savings which, you know, cannot be digitally impacted. I

chafed at the bit when we started that. I said this is really going backward. You create a digital capability and then you say, OK, I'm putting this aside so it cannot be digitally, uh, touched. But I began to think the same question is, you know, sometimes friction necessary. I think because the changes that are happening are so acute and nobody knows where it could go, it's not illogical to say let's produce fiction in the sky and lock some money away and not make it digitally available.

Um, and then maybe you'll act if you're sitting there, you, you know, maybe pass some transacting entries or you still got to send a follow up to somebody you have to call somebody, right? Today's um GEI with the LLMs in the back of it. uh forget domain specific ALM broad LM, they do all four. They read, they read better than we read, they synthesize, they can produce a 4 page summary like this of everything they do synthesize it. They produce output, visual output, audio output, pitch books.

And with agentech, they do your actions. They will pass your entries for you. They will send a follow up email, they change for whatever. So if you think about the nature of uh GEI, it does everything a white collar person does in banking, 70% of our jobs are of this nature. So you'll find that increasingly the computer can do a lot of this more efficiently, better and more effectively, and so there's one big change. The second big change we've already seen, which is the capacity to predict.

Right. And so exactly as Netflix and Amazon, we predict what will the customer want to do, what, what can we tell the customer to a large extent it's very helpful because you can give the customer a much better level of experience and service because at, uh, you're not dealing with the customer the segment of one and you

know the customer intimately. You don't, but AI knows the customer intimately and can therefore, whether it's new products or just service, do a much better job than you could before. So I think the way banking will be done will change, efficiency will increase, your um um the customer experience will change, the customer outcomes will change, um, all of this, and this will happen in the, in front of our eyes in the next 3 to 5 years. The big question is, do you get a step beyond that?

So at um um recent um an offsite meeting we had, we had the COV Bank and he said they're speculating about a purely AI driven and design bank where the customer designs the bank. You don't even need a bank, right? So you have the AI moves and the the customer can pull it together. The customer creates his own AI bank and each customer creates the 9 billion people have 9 billion banks all created by themselves using AI tools who can do all of the things I talked about but for the customer.

Right, can do the management so it's a customer agent which is working in the world of finance directly for a customer. Now I haven't thought enough about how this will function, but I can see the underlying philosophy. If you can get to where I'm talking about, could you take it to the next level? I think it's not impossible.

know to what extent AI can go. Does AI get to a stage where it's almost sentient and therefore it is now doing things you hadn't thought about, not impossible. So are there a risk that will come along the pike? I think there might be. And so we've got to be quite thoughtful and cautious about, you know, how do you put things to work. One thing you take GEI over 18 months we've used a lot of GEI and DBS.

And until this month we basically said we won't go direct to consumer, so we will put a man in the middle, a human in the loop just because I'm not sure what else is going on over there. But eventually you get a greater degree of confidence and say, OK, let's try this. Let's do a low risk and you start building from there. Um, we will have to do trial and error and make sure you do the low risk things and not bet the farm as you go forward.

In addition to the risk in the banking system itself, you know, the model is they do model it right and so on that even human beings can make a difference. But the bigger challenges to me are the social challenges, right? And so I talked about a new way of working. I talked about, you know, a new nature of work, but what does that mean for society? What does that mean for the workforce? What does it mean for labor markets?

What does that mean for, you know, uh, the old equation, the capital and labor, this thing, productivity. I don't really thought about any of those things and when you push the argument people say, OK, we all work 3 days a week and rely on UBI universal basic income, but I don't know whether people have thought through, you know, how this works and what it means if

you're just sitting and working 3 days a week. So I think there are a lot of uncertainties out there, and this has been one of my big challenges in the last couple of years as CEO. How do you calibrate and get that balance right? One part of me.

Responds to the Chuck Prince uh statement and the music on you got to get on the dance floor, and I think as CEO I would have been remiss if I had not led DBS into embracing data, AI, GEI, new ways of working we'd have got left behind and we owe it to our shareholders and our customers to do well by them. But at the same time I've been acutely conscious of all these big issues the ethical problems, the moral problems,

the humanistic problems, the risk problems. So while we've been embracing this, we've been trying to make sure that we get the balance right through our oversight committees through, you know, one step at a time, um, say, OK, we don't have to be first to market for this, we can be 3rd to market because we just need to understand what is going on. I'm hoping we have the balance right so far I think we have, but we've got to continue to make sure it's a balanced approach.

So the notion that the bank would sit here and say, OK, I will now change this by deciding whether I give you money or don't give you money. Is a little bit um short sighted. I mean it's it's unreasonable. Who's the I say who's the bank to play God? If an elected government of the country says I still continue to need fossil fuel energy for my people because the people who elected me still need electricity, power,

and the GDP is only $2000. Who's the bank sitting outside to say, hey, you know what, I know better than you. I don't think your people deserve energy and so I'm going to turn off the tap on this and you figure out how to get renewable energy, right? So it's not straightforward to say the banks should do it. Have the banks been able to help with the process? I think they have, but the whole transition itself has

been slow. So, you know, yes, the banks have, you know, we've got $80 to $90 billion in sustainability link loans. Do those loans make a difference at the margin, yes, I give somebody cheaper money if they're doing green stuff. It's more expensive money. And so hopefully that incent the right behavior to do more. Activities to do less brown activities and so on. We're giving people money for transition as we move from brown to green, we'll give you more money. We'll create more programs.

So I think we are being facilitated. We're trying to make sure that we help people go from one end to the other, but can we be the principal driver of the change? I don't think that's realistic.

I can name half a dozen times when geopolitics was more fractious than it is now, and if you go back to the 19th century, I mean, people are constantly warring with each other all the time, so this has not been the worst. And if you look at the pace of change in the 1880 to 2000 period, uh, to the 1900 period with that went to electricity, power, steam, transport, globalizing world came together, and the world saw some massive, massive changes at that point in time as well.

So even from an innovation standpoint, where there's a lot of innovation happening now, we have seen that before and I am heartened and hopeful about the fact that we as humanity have been ingenious enough and creative enough to see our way through these issues and by and large the world is in a better place today from a uh uh um quality of life standpoint, uh, if you, you know, um uh um park the environmental challenges for a minute.

You know, healthcare conditions are better, life spans are longer, you know, infant mortality is lower, educations are higher, poverty is lower, and now the world has progressed, uh, well. If we can see a way to addressing some of the big planetary challenges climate and biodiversity for sure, um, I think we're still, um, in a good place in terms of where mankind needs to go.

find them all by Googling DBS Research Library. Have a great day.