The Reality of US Banking Infrastructure with Peter Hazlehurst, CEO of Synctera

Peter, great having you here. >> Thanks. >> Um, so yeah, I mean I'll set the stage a little bit. Uh, but yeah, you've been building in fintech for about 30 years. >> Yeah.

>> Uh, which is older than I am. So >> sad. Sad. >> So it was long before fintech was even a buzz word. Yeah.

You went from coding a core banking system on Windows in 93 uh to pioneering account aggregation on Yodi. You launched Google's early mobile payments and you even helped Uber build a digital bank for drivers. Um, your journey journey spans startups, big tech, and now you own a BAS venture. So today, rather than just talk about buzzwords or funding rounds, I want to go behind the scenes into the judgment calls, design trade-offs, and hardworn lessons that come with building banking as a service and fintech platforms over a decade. Um, so yeah, I'll just start like you moved from studying law in Australia to writing a core banking system in the US at age 22 in 1993.

I'm curious to understand what pulled you from law to going into banking infrastructure so early. >> Yeah. Yeah. So look, uh, I graduated high school in 1990. I went to a conservative, prestigious, whatever you want to call it, British styled, uh, public private school.

So, it's called Camber Grammar. And a a big cohort, at least a third of my class take a gap year cuz you burn out. You've done your exams. You're like, I'm done. And so, I did that in '91.

>> And uh at at the start of 91, my dad said he's moving to Brisbane. So, I was living in CRA and you're basically on your own. You have no money. I didn't have anything. And so I needed to get a job to pay for rent because I needed to live somewhere.

And so I got a job as a typist literally typing in quarantine inspection reports. So imagine coming to work every day and this is like a stack of uh almost like sort of um filledin forms and I had this IBM mainframe dumb terminal connected with a 75 board modem. Not 75 kilobits, not even 75 megabits, 75 characters per second. Oh wow. >> And uh and the way it worked, you just type type tab tab tab and everything's great.

And uh it was fairly mind-numbing, but the the department I worked for, quarantine, was the first government department that was fee for service. So it actually had to break even so it could charge fees. Um and as a result, it embraced technology. So in early 91, they got the first Windows network. Uh so and as part of that they got PCs.

Windows 3.1 had just come out. This is a long time ago. And uh there was this language called toolbook. And so if you go back in the eons of time at the time on the Mac, there was this thing called HyperCard. >> Yeah.

>> Which was a modern-day app builder and and it didn't do very much. And um Bill Gates and Paul Allen had had a falling out. Paul Allen left Microsoft um after being diagnosed with long non-hodkkins lymphoma. And he built this new app called Toolbook which was basically a ripoff of Hyperard but for Windows. And Toolbook was kind of nice in that uh you could sort of paint regions of the screen.

And one of the things was I did was I wrapped the main frames uh UI with an explainer. What does each field? So, I was like helping new people, didn't have to learn the main frame. On the back of that, my boss at the time, this guy Robin Salvage, super nice guy, he's like, "You look bored shitless." And I was like, "Yes, I am." And he's like, "Uh, would you like to go down to Melbourne for a oneweek training course and become a programmer?" I was like, "Sure, that sounds cool." So if I go down to uh Melbourne for this programming course and I learned how to program SQL and this new language called SQL Windows that it's been started by this guy um Gupta and to put things everything's got layers to it. So many people may not remember that Larry Ellison used to be a salesperson at IBM and at IBM he used to sell DB2 which was the old mainframe database and he's like hey these Unix computers and and stuff are coming up mini computers IBM we should build a database for many computers and they said no and so he said all right I'm going to start my own company and he started Oracle and he started with this guy Bruce Scott and uh Bruce Anumang who was a salesperson at Oracle came to Larry a little while later and said, "Hey, these PCs are a thing.

We should build a database for PCs." And he said, "No." So they left and created Gupta Corporation, which created a database called SQL Base, which was semantically exactly the same as Oracle. Same tables, names, same columns, everything, but it ran on uh Novel Netware, which was the big prevailing sort of up andcoming LAN operating system at the time. And that's what we built on. So anyway, so I learned this programming from this guy Tony who was working at KPMG. Tony and I have stayed friends ever since.

Uh he lives in New Jersey now. And that and on the back of that um started to build apps for the Australian government. Did that for 6 months. Uh and then school started and so I started university doing a double degree law and accounting, commerce law as we call it in Australia. And in the middle of that, I went to the US for a developer conference here in San Francisco.

So I'm 19, 19, 18, I don't even know. And at this developer conference, they had an opportunity to ask questions and and um one of the they had an open mic. And I got up to the open mic and I said, "Look, mate, it's broken." And he's like, "What are you talking about?" And I asked them to type in a query on the screen and in front of a thousand nerds, the database blew up. And at that conference, I basically got three job offers. One to work on the database for the trip 7 Boeing.

And I kind of knew what Boeing was. So I was like, that's cool. And the second was to go work at Goldman Sachs as a DBA, but I didn't know what Goldman Sachs was. I'm 19 from Australia. Remember, there's no internet.

So >> true. >> There's no concept of that. And then the third was this dude um who literally said, "Let's do lunch." And I giggled cuz like in Australia, typical American [\h__\h] Let's do lunch. And but he was the only person in a khaki shirt and or khaki pants and a open collar shirt. He was from Florida.

And so I had lunch with him and he's like, I'm building a banking system. Do you want to join? It's a startup. And I didn't know what a startup was. Like 19, 20 years old in Australia in the middle of nowhere.

And then I didn't hear anything from him. So I was like, "All right, typical American, no follow through." And you know, Australians and Americans have a lovehate relationship. Let's put it that way. And anyway, so like 3 or 4 months later, I get a fax at the the office and it's this long contract offering me a job to be the head of the first developer head of engineering at this new startup. And at the time, I was making 25,384 Australian dollars a year.

>> Very precise. >> Oh yeah. As an ASO3, which is the the lowest of the low public servants. But I was working full-time and going to school full-time and the job offer was for 55,000. So I was like, "All right, double sounds good." And then I thought about it for a second.

I said, "Oh, it's in US dollars." So it's four times my salary. So I was like, "Screw school. I'm out." And uh moved to the US when I was 20. And so that was 1993. I had my 21st birthday uh sort of 3 months in.

So I landed March 12th, 1993. and we built a core banking system and I didn't know what a core banking system was. I was like, I don't know what banking was. But, you know, from a place of ignorance, we had a couple of people on the team that were product what you would call a product manager now then was a sort of a business analyst type of person. And we built the system and it was kind of cool.

And I distinctly remember we got to the end of 93. We were still based in Wilmington, North Carolina at the time. We had our first organizational meeting. So, we flew down to Orlando and I spent some time with the CEO. He's like, "Well, how's it going?" And I was like, "Oh, we finished." Thinking we were done.

And he's like, "Well, how's the performance of the overnight?" I was like, "What's an overnight?" And then I realized all we had was we had a CRM system and we had an account opening system, but we didn't actually have any accounting or business or banking or any of that stuff. And on the basis of telling him that we'd finished, they went and signed the first bank, which was a bank in Osage, Iowa, one branch bank. Wasn't very complicated. So we had seven months to write a back-end accounting billing system, whatever you want to call it, a core banking system that actually did the math and calculated interest. Uh and then we went live mid 2000, sorry, mid 1994, so about 15 16 months after getting started.

And you know, it's kind of funny in retrospect there's been multiple opportunities to go build another core banking system. And I've always said no because it's too hard, too complicated, too much legacy work you need to do. And then if you sort of look back in time, the code that we wrote 30 plus years ago still runs lots and lots of banks in the US. And that just sort of shows you that banking and payments and fintech and all that sort of stuff peripherilally and at the surface looks really simple. those simple APIs, but it's 30 years of crud >> and gunk that deals with all the weird edge cases.

That is actually what banking and payments is. And it's almost impossible to replicate. You can't just code it. You actually have to experience the problems and >> the edge cases >> and all the edge cases because they're always different. >> Yep.

>> So, I don't know. Uh, it was one of these weird things. The first company I worked on went public small IPO 196. >> Phoenix, right? >> Phoenix.

Exactly. And um and then we were sort of on our way and we started to take it globally and and grow. >> So Phoenix was that that company. >> Yeah, that's right. >> And you were like very early employee there.

>> Yeah. First engineer, first first coder >> and head of engineering >> and then after that you went to Yodi or was that >> Oh, there were multiple companies in between. Yeah. Yeah. Yeah.

So Yodi was the next sort of real fintechy type of company, >> but that was not until after having worked at Nokia and worked on email and building phones with keyboards and stuff. And then I had done a supply chain company in between uh and then done my own startup called Bayport from 99 to 2001 which was when everyone was doing them and then do killed everybody. Um >> but that was Bayport was really interesting. So, we built CRM, we built full QuickBooks replacement, all web- based um back in the day when we were on dialup modems at 336 and we had 5-second response time. So, we built a whole bunch of cool technology was joint jointly built with a bunch of the folks at Microsoft on the Windows 2000 team because we got stuff hooked in.

Internet Explorer 4 had just come out uh which had the ability to send XML as an asynchronous payload along with your HTML requests and we were just building stuff from scratch that no one had really done before. And I remember when we landed the deal with Dell and Dell was selling these computers called Dell EWorks which were PCs designed for small business people. So you'd come online and you say, "Well, I need accounting and I need payroll." And we created an icon that landed on everyone's desktop, which was kind of cool. So hardware physically arrives at your house. You turn it on, Windows boots, you go through Windows setup, which is painful and ugly, and then you land on your home screen or your desktop, and up in the top corner was Robbie, which was the icon for our QuickBooks killer.

And that's how we started getting distribution. And it was kind of crazy back in 99200 selling SAS software before SAS was a thing. Um, and we had people paying monthly subscriptions for it and so on. >> You've done a lot of things before they were even things. Finex and now SAS and >> Well, yeah.

Yeah. Look, I mean, if you go back in time to when I was in Australia, it was really pre- internet, so it was like 9192. Um, there was the well and there were dialup bulletin boards and things like that. and I connected to one of those bulletin boards um here in San Francisco. And the school that I was at, ANU, was unique in that it was connected to what was called the global supercomputer network, which was a supercomput from Hitachi that was at our computer science school at A&U, supercomputer at Berkeley from also from Hitachi and a supercomputer in Tokyo and they were all connected underground by a 10 megabit connection.

So imagine doing nuclear bomb simulations and a 10 megabits back in those days was infinity bandwidth like you couldn't imagine >> and these supercomputers would talk to each other and calculate >> I can't imagine right now >> well you can yeah you can't imagine going so slowly >> but back in those days it was off the charts um but but it was kind of nice because you'd have all these engineers coding in SQL Windows and Gupta posting questions to the bulletin board and uh cuz I had this time zone advantage. I'm in Australia. They uh we ended up I could answer all the questions. So, everyone just assumed I was like some 35year-old coder based in Australia, whatever. And it you know the the famous New Yorker quote about the internet was on the internet no one knows you're a dog and it's like this seinal picture and that was me.

I was the dog. Like nobody knew that I wasn't >> the Aussie dog. Well, that no one knew that I hadn't been to school to study computer science. Um, and it was kind of funny because I I coded. I I wasn't an engineer.

I coded intuitively. I figured stuff out. There's no math or science to my how I thought about it. And I'm envious of those folks that have been to computer science and actually understand the math behind the science of computer science. >> But it's back to the future.

So back in those days, people were excited because you could paint a table on a screen and you could say connect it to this database and it would just work. And that was like this incredible innovation that you could see tables and rows on a screen. And we're kind of back to the future now. Like if you think what vibe coding is and playing with OpenAI and Gemini and stuff like that, it's kind of just an evolution of screen painting and and stuff like that. And I remember like in the Windows world, the world changed when Microsoft Access 1.0 shipped out because suddenly non-technical people could build simple database applications.

And here we are today doing exactly the same thing all over again. >> A little bit more advanced for sure, but yeah, there's very similar. Um, and it's incredible the amount of capabilities that it is allowing us to build. >> Yeah, it's super cool. I got my uh Mac Mini on its way behind my clawbot/maltbot.

I haven't used it yet. Open claw is the new name. >> Open claw is the new name. Yeah, >> as of today I think or yesterday. >> It's crazy.

It's been the most start repo. I think there's like 100 >> in commits already or something. Yeah. >> Starts in like a day or two. It's weeks.

Insane. >> Yeah. And then uh I think Cloudflare launched a >> lawsuit against them. >> Uh Claude definitely did. So, they had to rename, but Cloudflare has launched a containerized version, so you don't even have to have the Mac Mini anymore.

>> Oh, wow. I didn't see that. >> So, I don't know, maybe I'll return it before 30 days are up. >> And one thing I'm super curious about, um, before going into the whole entrepreneurship, um, aspect of things, you were kind of an entrepreneur within big corporations by heading some very specific products. Um I'm particularly curious about both Google Payments um your CEO of Google Payments um in the early days which really led like the whole fintech as well um wave and you also tried to build a bank for drivers at Uber which to be honest before doing the research I didn't even know was something.

So um question I have is what is the lessons you have trying to marry Silicon Valley and tech companies to actual financial institutions? >> It depends on the geo and depends on the market and the timing at Google. One of the things that was challenging about what we were doing is we were very clearly a tech company and we had payments obviously to facilitate people paying for Adwords and AdSense. That was kind of the the genesis of it all. And then um Andy came out with Android and suddenly we had to take this infrastructure that was optimized for 70 million line um monthly statements to some big advertiser and turn it into a real-time purchasing system.

So you and me buying a game and that was hard. But Googlers being first person or first person principled built everything from scratch. and you never made an assumption that anybody built anything ever before in a good way. So you just started again. And so Google was really interesting because we were trying to do that while trying to solve a technical problem which was we wanted to have this idea of pay with your phone.

The problem was at the time the operators uh wanted to control the SIM card. Um and the operators therefore controlled access to the SIM card and on the SIM card was the secure enclave where your digital credentials, your cards would be stored. Um the problem was there's no storage. There was it was very limited storage and maybe you could store four or five cards, but you could only store one or two brands. So you could either store Visa cards or Mastercard and maybe a Discover or something like that.

And the challenge was at Google a technical challenge which was the only way to get to update that was delivered over SS7. So SS7 is the underlying protocol for SMS and it's a tower tower configuration protocol and it's designed for lossless transmission and retry and it's super low bandwidth because it's going over the text channel like literally SMS's being sent. So imagine encoding a digital representation of an American Express card, sending it to the cloud, sending it to First Data, sending it back to Verizon and and hoping that it lands on the phone. >> It was a [\h__\h] show. >> Yeah, it's a [\h__\h] show.

>> Half the time didn't work. Um and then you ran out of storage because we already had customers in >> How many customers were like how many customers were at least in the trial like the Google payments? The original Google Wallet, because it required this triple unicorn of impossibility, was very limited distribution. So, it required a specific phone, the Nexus 4S. It required a specific network, uh, I think it was AT&T at the time, required, no, T-Mobile.

It required a specific bank, City Bank, a specific network, Mastercard. So the number of people that had that confluence of things was pretty small, but if you had them, we could we could maybe a card to you. >> And that was in what year? >> This is 2012. >> Okay.

>> So that was a while ago. >> That was a while ago. >> And so in 2013, uh we realized we didn't want to play ball with the operators anymore. Uh because they wanted to tax putting a card on the thing >> and we're like, this is silly. So we then got the hardware guys to move the NFC chip into the phone natively rather than in the SIM card.

And so the secure enclave, which everyone uses on their iPhone and doesn't really think about, now lived in the phone. And we decided to let it be open. >> Interesting. >> So anyone could play with it. So in Android 4.4, we unlocked NFC, something that Apple has only recently done in like the last year as a result of the European Union, >> 15 years ago.

>> Yeah. And uh but then we realized we didn't want to have to go and talk issuer by issuer, you know, get you enrolled. And there was no concept of tokenization back then. So we bought a company called TXV in New York that was a payment card processor. And we came up with this sneaky idea of the phone itself being a discover card.

When you tapped and paid, the discover card would come back to the processor and then based on what you thought you were doing as a user, so you said, "I want to pay with my American Express card or my City Chase card or whatever." We would then do an e-commerce purchase. So, we turn a card present transaction into a card not present transaction, synchronously, validate that the transaction went through, and then approve it at the network. And it was basically tokenization.5. Um, it kind of worked. It it solved the problem, but then you can imagine the the issuers like AMX and others not being thrilled about being frontended by a Discover card.

And now back to the future, Capital One buys Discover to do this all over again. So, it's it's kind of interesting how these things go in circles. >> Yeah, 100%. There's something I'm okay curious about. Um, from like this beginning of the conversation, you're obviously a big builder.

like you love building and you've been building since like >> 18 basically. >> Oh, my first coding job I was 15 16 >> right on. So you've been really like since the beginning and you've had a couple of companies. I mean Sera is like the biggest one so far and it's doing incredibly well. I'm super curious to understand when the job stopped being about building the product and was more about leading people, setting vision and what was maybe the hardest adjustment to that for you.

In any early stage company, it's always this combination of build product, build team irrespective of your role. And the best people at startups know that. And the best leaders of startups hire people that are always looking for how do I how does what I'm doing make the company more of a company rather than I just did my coding and I did my job and I walked away. >> And and not everyone's good at that. Uh, some people really like the safety net of working at a big company where I can do my thing and it's probably safe.

I think generally speaking, people's belief that the company will keep them a job has deteriorated over time. And the premise that you're owed a career is not a thing. So, you have to own your career. But I would say the first time I really felt it was at the end of Phoenix in the start of Bayport where I became a co-founder. It was this sort of transition from realizing you could have the best product ever, but if you can't afford to distribute it, it doesn't matter.

If you don't have the right relationships, it doesn't matter. If you don't have the right funding, it doesn't matter. In Bport's case, the the hard part for us was we had a great product. people were paying us and in in the early days of dotcom but uh we we faced this existential threat which was one of our co-founders was 100% exposed to.com and when do blew up he's like I don't want to fund the company anymore I'm going to go back to doing whatever else I did and that's when I realized that the job of investors and in VCs and stuff like that is not just money. It's also a discipline of feeling that you have to give your information of how's the company doing to somebody else.

You can't just keep it to yourself. And that validation and also invalidation, Peter, I think your idea is great, but it's never going to work type of stuff is a feedback curve that is no longer a product question. It's critical for the company question. So it took a long time to realize um right product wrong timing doesn't work um right timing wrong product doesn't work either and I don't know I I would say there was no sort of one seminal event but when we sold this company is to Nokia we went through this amazing experience and the onboarding inside Nokia was amazing. So at the time Nokia was bigger than Apple, king of the world and we did this onboarding and we didn't know what onboarding was.

We were like three people. The the whole company was like 20 people. But they said come to Dallas and we're like great. We came to get us and back in those days Nokia's headquarters was off the end of the Dallas runway, the FW, because they had factories and they'd put 10 million phones or a million phones in a plane and send them across the world and stuff. They were making phones in the US.

So, we went to the onboarding and this big uh Finnish guy gets up on stage, Ole Pekka, and he's like, "Everybody stand up." And it's like like we're at like a big stadium. So, I don't know, 10,000 people stood up or whatever. He's like, "Sit down if you've been here for more than 10 years." And like half the audience sits down and we're like, "Cool." And then, "Sit down if you've been here for more than a year." And you know, two thoughts. sit down if you've been here for 6 months and and there's like less and less people standing. Stay standing if you this is your first day at Nokia.

And it was me, the CEO of my company and the head of marketing. And then all the lights went on us and they said, "Welcome to the newest employees of Nokia." >> And you know, and like the music came on and it was like the most amazing onboarding of my entire career. And that's when I knew that being a nerd is interesting, but being a builder of things and places and times and creations actually creates a lot of value for a lot of people >> and it was kind of fun to be recognized. >> And so on that great culture, great on boarding culture. Um Nokia must have been incredible.

Um we both to some extent work in unsexy businesses like Nokia at the time must have been well if it's like Apple it must have been one of the most sexy >> amazing it's most so people must have like flooded their gaze to get in to try and get in. >> Um how do you create a missiondriven culture around an sexy problem and still attract incredible talents? >> Yeah. So, look, I think um no end consumer is ever going to know Singer exists, and that's okay with me. >> Yeah, same for us.

>> Uh but what I rally around is products that you can see and touch either that you build yourself or that someone builds on what you build. And sort of I anchor it on my mom who uh is in her 80s and trying to explain to her what I do. And if she gets it, then we're okay. And it took a long time for her to get what Singer was to be fair. >> That's impressive already.

>> She understood Uber. Uber was straightforward. And the sell on Uber was >> I sold her car and she was really mad at me. And I was like, you can't have a car. It's not safe.

And and the solution to that was proving that the liquidity of her pushing the button in the app saying, "I would like a lift to to see to go to church, whatever," was faster than the time it took for her to go to the basement of the apartment building, get the car out. Thank god Camber liquidity for Uber was really really good. Uh but now I can track her and I know where she is and she gets it and she's cool. When I explained to her, well, Sintera helps people build the next Venmo. Nothing.

>> I was like, well, we help you build the next Brex. I'm like, you know, mom, when someone says, hey, can I have 10 bucks for your contribution for a coffee? then you give them the 10 bucks. She's like, "Yep, we help you do that with your phone." And she's like, "Oh, so I can put money in my phone." I was like, "Yep, you can." And I I didn't have to explain, "No, you can't." But she got it. >> Yeah.

>> And and suddenly I was explaining to my mom, who is very non-technical, like didn't know how to turn off her iPhone >> um to restart it. Uh, but I got her into that headsp space of understanding what we do. Finance and money is in everybody's lives. It's almost impossible. Like my son this morning's like, "Dad, I need a gift card for his buddy.

I'm going to his party." And I'm like, "How much?" And we negotiated from bid ask of 100 to 25. And we settled on 50 bucks. And then it was the form of payment. Is it a virtual gift card, physical gift card? And he gets it.

He understands the trade-offs. Um, but helping him understand why Sinara is interesting. He actually got it really fast. You know, he's 14, he's 15. And their awareness of how things work is so much higher.

And for tech people wanting to join companies like ours, it's not about necessarily the core of what you're building per se. It's about all the potential of the people to build things on top of you. And we talk about potential a lot at cinta of unlocking people's potential in finance and in their financial lives and stuff. And I sincerely believe that I think you know if you take a company like Maslo which is Brex for nonprofits you know we everyone needs an an analogy but call it Brex for nonprofits. The potential we unlock is for people to donate money to their nonprofit and know that the money gets spent the way they expected it to be delivered, which conceptually shouldn't be that hard, but it's actually quite difficult.

And there's lots of layers of build and stuff like that that make it happen. And if we continue to create products that help people do that, it's great. And then the next day, this morning, I was talking to a company that um built a rewards platform for travel. And I spoke to him three years ago and he's like, and Alex calls me up. He's like, "Took us three years to build it.

We're now ready to add banking." I was like, "Great. Let's go." And what does he want? A digital wallet, spending card, pay with your phone, but integrated into what he's doing. And that's that's kind of fun when you've got a sort of a general purpose product that can be woven into lots of different use cases. >> Yeah.

And I do think like that's one of the incredible use cases of AI. Um, I mean like we've been working together for a couple of months now >> and you know we're doing those AI compliance analysts and now with AI it's so possible to take in all your procedures, your policies, your risk thresholds, anything that's very specific to STA and make sure that our analysts our AI analysts work just like your human analysts would and at faster speed and whatnot. Um and so to that extent where do you think banking is in like 10 20 years with now that you know one you've got a bank as a service you're able to embed a general product into anyone's stack basically. Yeah. >> And then AI is allowing workers to be more and more specific to every organization they work from.

How does that intertwine? >> So I think uh we get to the holy grail a bank of one. Y >> and so completely personalized, works for me, does whatever I need, which could be different than my girlfriend or my wife or my partner's needs, and um and it's dynamically adjusting what I need every day based on what it sees as uh financial needs, um life needs, and stuff like that. And and I don't think you're thinking about money anymore. And the thing is, most people think of money and are ashamed.

And most people don't look at their online banking because they're worried, what is it going to say? Do I have enough money for this? I know I should have saved. I should have been planning for the future and that sort of thing. And I've been in this game for quite some time.

And it's been an oscillation between big company and little company. And so I do my time at the Google, Nokia, Ubers of the world in order to fund the the lack of income lifestyle of building a startup. And hopefully the startup works and and sometimes it doesn't and sometimes it doesn't. Um but it allows me this flexibility of lifestyle. Not everyone has that.

And a bank of one for me would be knowing that sometime in the future my cash position gets very low and it's planning ahead and maybe it's going out there and selling my shares automatically on the secondary market because it knew I needed money to pay property taxes or something like this. And and it's so personal and so aware of what I need. And if you think about Bank of America and Chase and all these guys, they fundamentally succeed by telling consumers, fit a box that I've put you in. We have regular checking, premier checking, private banking, and you're in one of those three buckets. And all of them would like to have a personalized solution, something that's adapted to you.

But in the absence of that they commoditize everything. Banking in the future with full AI deployed it's yours. It's individual. What is that layer? Cuz like what I was thinking and again I don't know as much but you know with all that personalization I think that the older banks um that might not adapt as much will become the back end the infrastructure layer and we won't interface so much with them.

Um but so is it a new breed of fintex? Is it a layer of fintex that is going to work even on top of the existing fintex that we have today? How do you envision it? >> So I think a couple of things are going to happen. I think if we're lucky some global body call it the United Nations, call it whatever harmonizes banking rules across the globe.

meaning that KYC is portable, that identity, this concept of an identity card, whatever you want to call it, works everywhere. And when you do that, then you start to unlock my money doesn't have to sit in a certain physical place. And when you do that, then the banks themselves start to say, well, what's the value that I create? And the biggest of the banks, the GIBs and ultimately the the national network banks like the Fed and the EU and stuff like that, EMA, um, devolve into this concept that the cell phone operators have evolved into, which is a network of connectivity and pipes and infrastructure that's tollgated and taxed along the way, but fundamentally isn't what you think of. So, when I use my iPhone, I don't think to myself, I'm so glad I'm a Verizon customer.

I am glad that I'm a Verizon customer because it generally works, but I have no connection to to the network. We have a forced connection, if you will, with our bank today. Um, and FinTechs right now, particularly in the US, are dependent on banks. So the second order of improvement will be anybody that can demonstrate that they can meet some level of qualification should be able to do banking in some way, shape or form. And right now you've got variations of that in Europe with EMI and the ability to become a EUR e-oney issuer.

US has nothing like that. But five years from now, 10 years for sure, you'll have global identity. You'll have transparency that any person can be a fintech if they want to be. Yeah. >> And then the world changes quite quickly.

>> I wonder how quickly that's going to happen in the the US. Um, I mean, as a European, um, it's insane how fragmented the US is, like within the different states, and that you need Zel, which doesn't really work with all the banks. And like I've used Revolute since it's come out basically, and it's the most practical thing ever. And here it seems like it doesn't even work. And um, even in India, you've got unified payments infrastructure called UPI.

Um and the US is still very very very far away. I mean um like we work we also have clients in APAC and um although a small country Singapore has been incredible at doing their KYC which is regulated and they have this um digital KYC basically and in the Middle East it's starting to happen as well. >> Even Nigeria does it. >> Even Nigeria does it. Um how does that fragmentation impact you?

So commercially fragmentation is good because the more difficult something is the bigger the moat of if you can solve it. So in some ways I'm like please don't make it any easier cuz I'll get more competitors. Um but in other ways if you're a builder and you don't have a platform like Singer you realize 48 states have different money transmission rules. you realize that every state has a different sense of what's an appropriate KYC definition. Some states preempt uh what the rules are.

So, we're doing a couple of prop tech fintech and many of the states in the US have state regulations that say if you're doing a security deposit, say you rent a house and and you put $5,000, the money for that security deposit has to be stored in a bank account in a branch in a city where you live. So just and it's obvious protectionism. So some local person bribed the influenced bribed is a tough word. Uh the regulator is to say well we don't want money leaving the state. >> Yep.

>> So handwave handwave uh and now and so but think about the fragmentation. So if you're doing a prop tech startup and you offer uh rent in rent rent management now you have to open 50 bank accounts in every state. sometimes city by city uh to keep track of the money that's being rented. Then you have to agree to pay interest on it. The rates vary by state.

Uh the interest rate may or may not need to be capitalized every year. It may be rent controlled and so forth. And all of that local regulation in most other countries is federally organized. So the reason why banking works in in India or with UPI or picks with Brazil is this the federal government came along and said these are the rules you all must comply and they put various sort of penalties on the banks if they chose not to comply. EU did sort of the same thing with PSD2 very lax enforcement.

It took a long time for a roll out but it's kind of there now. Then there was this nonsense of open banking which no one really takes much value out of but it's a hypothetically interesting space and but they were all done federally and the US is relatively unique in that the union of the states is in fact real so each state has local provenence of this >> and uh as a builder knowing that domain knowledge is actually really unique and special and that's what people pay for And and I see this all the time. People say, "I'm just going to build it myself, Peter. Your stuff's too expensive." I'm like, "Look, if all you did was pay the minimums to the 12 vendors that we aggregate for you, you'd be paying 50 $60,000 a month just in minimums. Why would you do that?" And they're like, "Well, I don't want to pay your 20,000 a month minimums." I'm like, "But remember, if you do it yourself, it's probably 60." >> Yeah.

And then you have to integrate and then you have to normalize everyone's definition of what a customer is and so on and so forth. >> You're way ahead of us obviously, but what we do right now, we have a lot of people do saying the same thing. We could build those AI agents. Not that hard. And I'm like, you could and you'd probably get good results.

Um, with like GPT, anthropic, and whatever, you get 80% of the way there, but you could onboard people for sure. >> And so what I do now is I just tell them, we'll help you. We'll work with you. We'll get a weekly call. uh when they realize they can't do it, it snatched them in.

Um and that works quite well. But I'm I'm curious like your product is there's incredible amount of complexities in building what you've built like the aggregation, the different states and whatnot. >> Um it seems well today at least seems like an obvious idea to build but a very complicated idea to execute. We both run financial services and I know how hard it is to get your first clients. >> How did you even get the first community bank to be behind Singer?

>> Ah, that was that was really interesting. So, um, when I first started in banking back in the 90s, uh, denovo banks were actually a thing, meaning anybody and their best friend with a little bit of funding could start a community bank and they were popping up like Wild Parish. So building a new community banking software platform which was Fenix was perfect timing. We we got lucky. It was great.

And you had this conversion from the mainframe which was hosted banking to desktop and client server banking. So we were at the early stages of don't bank in the cloud which was what hosted banking was. Bank local. And we we would go and do our demos with um this Sun1 server which was like a pizza box shaped thing and a Toshiba Techra laptop and that was the whole bank and the bank was used to big mainframes and stuff like this AS400s and so their brains exploded but you got them hooked on this idea that I could run a bank in a box which was this concept and and that became this big unlock for the future. Fast forward to Singer and effectively fintech banks are like denovo banks, meaning that it's an uncharted space.

The rules aren't super clear and if you get lucky, you find innovators that were nerds in some other life and said, "Hey, I'm going to go build a bank or I'm going to partner with some bankers and do that." And our first real partnership was with a bank called Lineage, which was just that. So it was a bunch of old school bankers that had been successful in Nashville for 30, 40 years doing community banks that had somehow come into touch with these three or four nerds said what if we build a digital bank and um and it just was interesting alignment. We were lucky that that then parlayed into a bunch of PR about you know in the early 2021 time frame um how can you build a digital presence and we were super lucky in the fact that 57 FIS and all Jack Henry's of the world their core infrastructure nobody wanted to code to and so there was an opportunity but it was a leap it was a a value creation together and the best way to do that is to align outcomes And so we basically started the company saying we'll share every profit with you 50/50. We when you win uh which was giving away a lot of the value that our competitors weren't giving away, but it allowed us to have deeply connected partners in the banking site. >> I guess like compliance must have been like one of the early big requirements.

Um you partnered with Wolf at the very beginning. >> Yeah, that's right. >> Um how do you see it today? um from partnering with like companies like Wolf, having your internal compliance team, having potentially BPOS sometimes and having companies like Sphinx um help automate um on the AI side of things. How do you think about risk and compliance for you know such an important it's an an essential part of your business?

>> So I think it's just layers of defense, right? Um there's the simple basic stuff is there are a bunch of federal and statewide rules that you have to follow regulations. Uh strangely enough some people choose not to follow those regulations and there was a period of time where people got away with it the synapses of the world. Um but then when the problem with that is if you actually get successful people will come and try and find the holes in what you do. >> Yeah.

And uh and if fundamentally you're built on quicksand, you're doomed. And that's kind of what happened to Synapse Switch was fundamentally at its core, it wasn't designed in a compliant fashion. And in many ways, it was designed to work around the rules. So, we've always been and I've always been sort of long game playing this knowing that things would break and things would get every bank eventually gets uh an audit of some sort. And it's it's almost a right of passage.

Some banks get multiple of them and then you might wonder if they need new management teams. But it's not necessarily a bad thing to have the regulators come in and say, "Hey, you're pushing a little too hard over here. Tone it back a little bit and put more effort. Anticipating that we started with this concept of do it as a marketplace. So everyone else was sort of hardcoded to one particular bank synapse to evolve as an example.

Um and the problem with that is if anything goes wrong not even with the stuff that you control you're dead. And so we built this marketplace model but that meant we needed to build a lot more infrastructure on the compliance side that others didn't have to do. If you're hardcoded to one bank, tell the bank go use optimize or go use sardine or something else for compliance. But when you're bifurcating across multiple banks, you don't want to have like a 100 different vendors you have to integrate with and partner with. So then we put a lot of the compliance stuff on our side.

We built an embedded KYC and embedded K KYB. We built our own fraud monitoring initially partnering with um feedsai and then migrating over to Hawk AAI uh because we knew that most buyers of our tech wouldn't want to stitch it all together. But we also knew that the banks would require it all to be safe and sound. And so it was this constant push and pull of making sure that what we were doing would be safe uh would be compliant f first but also thinking about how can you reduce the time to market. So yeah it's important to be compliant but if you can build automation and tooling and partner with you guys on monitoring and observation then you can actually get the best of both worlds.

>> No 100%. And yeah, I know we're close to time and I want to go into um so there is like big companies, smaller companies, now your company 30 years. What does success looks like and where do you think the next 10 years will take you? For us at Sinta, I would say my dream state is a combination of Stripe and Shopify for banking. meaning that uh the sort of vision quest that I have in my head is and and you don't even know what a Facebook group is because see the bit where you're younger than I've been working but if you were on Facebook >> I am still on Facebook.

>> Oh my god. Yes. >> It stopped at my sisters. My sister's 19. She's never been on Facebook, but I was last generation of >> Fair enough.

All right. Facebook groups. >> I'll take I'll take it. But anybody that creates a Facebook group or a Reddit thread sub thread uh should be able to create a digital wallet that represents who they are. That's the Shopify for banking type of model.

>> The Libra a little bit that you were >> Libra. Exactly. Yeah, I know David as well. So, >> uh yeah, that was a crazy story. We we'll save that for another day.

But, um that's on one end of the spectrum. And then and if you think about Stripe's origin story, it was letting everybody build commerce into whatever else they're doing. I sincerely believe that it's a big part of it. But on the other side, where Stripe succeeds is they also have the bespoke custom advanced mode. And we've we're more on the advanced mode because banking is harder.

And every generation of our product is trying to get us down further and further so that we can on board more and more clients and let them experiment and try. The worst thing, the thing I hate the most is meeting a great founder and saying, "Look, go hack it on Stripe for the first 6 months. get into YC, raise 2 million bucks, and then call us back. And I don't want to lose that two-year gap or one year gap of YC. And so the next phase for Singer is building products that are relevant to the earliest stage while also being scalable and flexible enough for the biggest of the big fintexs and brands.

>> Personal question, are you proud of yourself? >> I think we've done some pretty cool stuff. Uh, Australians are pretty anti- ego on this sort of stuff. >> The same as you. >> We have this concept of tall puppies.

Um, I'm really really proud of what Sincerara has become despite all the crazy [\h__\h] that's happened over the last 3 four years in fintech. It's been a grind. Uh, we like everyone else raised a really early seed led by Lightseed. It was fantastic. We moved really quickly.

We raised a series A led by Finn Capital. We have all the glitterati of Silicon Valley fintech nerds as angel investors and all that. And then we went into this doom universe of like 21 to 24, 22 to 24 where it was hard to raise. Um, and the most valuable thing that you can have as a fintech or a tech company in general is persistence and resilience. And I don't know, we've done four or five extensions to our series A and I'm desperate to get a series B this year where we introduce a new person to the board, a a new strategic investor.

And I'll be really proud when we pull that off. We hit break even mid year this year and we're in a place where we're now really controlling our destiny. We're not quite there yet. I feel like we're almost a real company, but we've got a little bit more to go and we're really close. >> If you could go right now, talk to Peter, 18-year-old Peter, um, you know, going from that typewriting job to to the US.

What would you tell him? What's an advice you'd give him? >> Ironically, it's the advice I give to a so a lot of younger kids and stuff. So, I I have a scholarship for kids to be nerds at my old high school. And so every year I get to meet five or six nerds, kids, great uh and pick the winner.

And it's really amazing to see their how advanced they are in their thinking. And they all ask me what should I do in college? And I'm like the first thing you have to decide is are you actually going to learn anything in college? Um, and I will say the the huge advantage that I have is that even though I'm perceptively old, I have a five or a sevenyear head start on everyone's career cuz I just didn't spend time in university. That's not for everyone.

There are a lot of people that need that framework of growth and learning. But I would say 18-year-old Peter um the risky move of jumping out of university in and the obviously prescribed cushy job as a lawyer in Australia type of thing uh was worth it and um and you shouldn't be you shouldn't do what your parents say just because they say it. You should actually fundamentally want to do it. And retrospectively I would say the big learning is we do best at the things we want to and love doing and we will achieve the things that are grungy but we won't want to do them and we work two/3s of our time and live the other third if if that makes sense. And you'd be much more life enjoying if the thing you're working on actually creates pleasure as opposed to drudgery.

>> I couldn't agree more. Like um I think like right now I mean I was in the office at 7:00 a.m. yesterday left at 11:30 and people would think that sometimes like you're crazy. Why do you do that to yourself? Uh couldn't do any other thing.

I think it's very enjoyable like building a company, building a team, building the culture, the product, selling, raising, all the raising is not the most fun part. >> It's not the most fun. Um but it is um I forgot there's an exited founder founder that recently tweeted he's like sometimes while it's happening you hate it. >> Yeah. Uh but in retrospect it's always the moment that you enjoy the most actually.

>> Yeah. I would say look uh Jensen had this funny thing. He's like what do you do in your free time? Work. What do you do when you're sleeping?

Work. And what's fun for you? Work. and and founders uh and early folks in companies, even if they're not in an office or sitting in front of a keyboard, are always in the back of the mind running scenarios and games and stuff like this. Having kids changes that equation a little bit because you realize you can't actually control the outcomes as much as you would like.

And it's, you know, my analogy is uh when you do rock climbing, if you think about anything else, you just fall off. It's like as simple as that. You have to stay focused. But being a founder is this constant balance of trying to be present with the people you care about and and love and want to be with while persistively sitting in the back of your head, if I just fix that thing, I'll get another customer. And I'm so mad that I lost this trade or I lost this deal.

>> Yeah. >> And it's always there. >> Always. >> So there's no 996 for >> No, it's 24/7 >> 7247 or something. I don't know.

It's >> No, it is. It is. It is uh draining sometimes like even on the holidays. >> Oh, I agree. But you got to like don't be a founder if you're not energized by challenge.

>> 100%. I wouldn't do it any other way. What's an advice you'd give me? I mean like we're C like um pre- series A so hopefully this year um maybe same time as your series B. >> Um what's an advice you you give us?

I I would say the the number one thing early stage companies can do is stay on target. If you think you have a space, own it and and and really go after it hard. Don't try and be everything to everyone. the coolest founders say no to customers. >> Yep.

>> You're not my space. I'm not ready for you. I said no to a customer yesterday. And he was kind of like, "You're saying no to me?" I'm like, "Mhm." >> Yep. >> And he's like, "But why?" And I'm like, "Cuz you're too different from what I do." >> Y >> you'll be ready for me and you'll boomerang back, which is a very good Australian term.

Um, but I'll see you in two years. And so be focused on that. And above all, do things that have fun as a component. So if it becomes unfun, change how you're doing it or uh change who you do it with. But going into battle every day as at a startup is something that only works if people around you know that that's your commitment.

They honor that commitment and you you honor it back by doing what you said you would do. >> Yep. Well, listen, on those notes, um, that's a great way to end the podcast. I really enjoyed the conversation. I thought it was great.

Likewise, thank you. Very, very interesting, incredible career, incredible advice, um, and incredible clients. So, >> thank you. And I would be remiss of saying uh, working with you hasn't been really, really good. We're we've dabbled in AI ourselves, and it's clearly a skill set we need to grow into.

And so working with really smart partners and helping us do things quicker and better is super great for us. So thank you. >> Lovely. Thank you so much, Peter.