Sramana Mitra: Just broadening the line of questioning, could you talk a bit about what your analysis of the current FinTech market? Where are the key opportunities?
Matt Carbonara: Payments moving into different parts of the ecosystem is one trend. You can think about verticalized SaaS companies with an element of payments becoming part of them.
We’re investors in a company called HoneyBook out of Israel. They manage the RFP and invoicing process for creative people. For example, I’m a photographer. You and I are going back and forth over the details. They charge a monthly subscription fee for that person that runs that business to be able to manage that process more easily. The payment also runs through that platform.
We see a lot of verticalized SaaS where payments are becoming a piece of that. We do see payments becoming distributed and closer to the edge. We see payments becoming smaller. We see payments becoming faster and less of a centralized payment system.
We’re also looking at things like machine-to-machine payments. I’ll tell you about two investments that we’ve made. There’s one that’s running out of Canada called Trulioo. They do KYC or KYB. I need to know who you are to know that you are who you claim to be and not somebody with bad intentions.
There’s this onboarding process where you have to give some documents to prove who you are and this concept of validating who your customer is. That’s an area we continue to see innovation around.
We recently invested in a company called CarIQ that does that for machines. Where they’re focused on initially is on automobiles. If you think about an automobile, it’s becoming less and less of an owned resource and more of a shared resource.
Most millennials don’t own cars. Maybe these cars may not even have drivers as we get to full autonomy. If you get to that point, the car will actually need to make a payment. The car goes through a toll, or would need a new battery. How do you get the vehicle to make a payment?
Just like other payments, you need to validate. That’s what this company does. They fingerprint the vehicle to be able to tell you that it is the vehicle that it claims to be.
Sramana Mitra: I’m sure this conversation happens inside Citi. When you look at what the next decade looks like for Citi, what is the vision? What does the mid-21st century bank look like?
Matt Carbonara: It’s a focus on innovating faster. It’s a focus on providing to our customers and clients what they need. It’s a focus on showing up in all the places that banking happens. I think banking and transactions are happening less and less in banks.
We want to make sure we’re in those other places. That’s where things are going. I’m not close to those discussions around what our clients are looking for, but those are some of the trends I hear from my colleagues.
Sramana Mitra: One point that didn’t come up is this notion of credit. There is a tremendous amount of FinTech activity in the area of credit. You talked about the factoring company. That is happening at a very large scale. Companies like Intuit are in that business. Is this an area that you track?
Matt Carbonara: Yes, it’s an area that other colleagues on my team spend time around, which is new models for lending. One company that we’ve invested in is not exactly in that space. It’s Unison. It helps people with the downpayment for their home in exchange for sharing some of the upside in that home.
They will come up with a portion of that downpayment. You have a deal with Unison that when you sell your home, they get some percentage of the increase in value. What they’re doing on the backend is, they’re taking that instrument and packaging that up. They sell it to institutional investors on Wall Street.
We are looking at things in InsurTech. There are companies that make the mortgage process online much faster. It’s all about reducing friction. It’s this immediacy that people have come to expect from their experience with certain applications.
Sramana Mitra: Very interesting. InsurTech is very active right now. We’re seeing a lot of that. Property tech as well. Thank you for your time.