In today's episode, ⁠Ryan Zauk⁠ sits down with global fintech legend Oliver Hughes, Chief International Growth Officer at TBC Bank Group, a London-listed financial + banking services provider in Georgia in Uzbekistan.

Before TBC, Oliver was the CEO of Tinkoff and Head of Russia for Visa. He is also on the Board of Tabby, a leading shopping and financial services player in the Middle East that is allegedly eyeing an IPO after a $160M Series E.

After 25 years at the cutting edge of international fintech, Oliver is taking on what he hopes is his final fintech chapter - scaling TBC Bank Group internationally, starting with Uzbekistan.

I'm sure many of our readers + listeners may be scratching their heads...a fintech pioneer who could choose anywhere in the world to work...chose to dedicate the next decade of his life to TBC Bank Group and Central Asia?

However, as shown throughout his career, Oliver can spot and act on massive trends early. So what does he see here...

TBC Bank Group's momentum in recent years has been remarkable, and the market opportunity in Uzbekistan is much larger than it appears from afar.

Let's take a brief look at the company:

TBC is the parent co of TBC Bank Georgia and TBC Uzbekistan (where Oliver focuses). 

In Georgia, TBC is the leading financial services group, with almost 40% market share for customer loans and deposits. Kind of like the traditional bank that helps fund the Uzbekistan story...

Uzbekistan is where the fintech story emerges. In just ~2 years since launch, TBC Uz has reached:

• 50% of the Uzbekistan population
• >100% loan portfolio growth for 2 straight years
• Strong profitability with $41M(!) in net income in 2 years (nearly unbelievable for US fintech)
• A rich product ecosystem (debit card, credit card, MSME banking, etc.)
• Eyes on a third market in the future
• Is fresh off a $37 million raise to continue its push into AI and new product development. The investment came just months after it raised $38.5 million in July

The profitable growth is stellar - one that you don't see replicated elsewhere.

What really interested me was a crude TAM comparison to another notable fintech in the region, Kaspi, which had a major US IPO on the NASDAQ in 2024.

Kaspi is a superapp from Kazakhstan and in 2024 produced roughly $4Bn in revenue growing 30% YoY with 40% net income margin. Those are numbers and scale few companies in the world can manage...and Kazakhstan is a country of only 20 million people.

Uzbekistan's population is nearly 40M people, and Georgia's around 4M - when combined are well over double Kazakhstan's.

As Oliver points out in the episode:

“I'm someone who believes in the thesis that there are overlooked, underloved countries that deserve a lot more attention - You can build viable, scalable businesses with the right execution. It's all down to execution. It's not down to the number of people in the country.”

I think the stage is set...I'll let Oliver share the rest.

Episode Highlights

3:48 Oliver's background and path from Visa to Tinkoff to TBC

6:41 The problems Tinkoff was solving, why it got so large, and the key lessons he learned from scaling it

8:50 An overview of TBC Bank Group: What it does, how it operates, and its key products

13:51 Why Uzbekistan has probably the greatest open banking system in the world, and a shocking fact about Telegram usage

20:19 The complementary nature of the 2 Uzbekistani apps: TBC Uz and PayMe

24:20 The near-unbelievably high NPV his team uses to underwrite projects and why it's so effective

27:03 His thoughts on the new wave of mobile sim card efforts / MVNOs by firms like Nubank and Revolut, and infrastructure players like Gigs

31:20 The "Fintech Perplexity" idea and other creative ways his team is experimenting + deploying in AI

34:17 What their 3rd market might be, and what's ahead for his great team

37:15 Rapid fire round

--

TBC Group: TBC Bank Group’s mission is to make people’s lives easier by providing digitally led financial services to retail and corporate customers. TBC Bank Group PLC ("TBC PLC") is a public limited company registered in England and Wales and is the parent company of TBC Bank Georgia and TBC Uzbekistan. TBC Georgia, together with its subsidiaries, is the leading financial services group in Georgia, with a total market share of 38.5% of customer loans and 38.1% of customer deposits as of 31 December 2024, according to data published by the National Bank of Georgia. TBC Uzbekistan is the leading digital banking ecosystem in Central Asia with 18 mln unique registered users that includes TBC Bank Uzbekistan, the country’s largest mobile-only bank, Payme, a leading digital payments app for individuals and small businesses, and Payme Nasiya, an instalment credit business. TBC PLC is listed on the London Stock Exchange under the symbol TBCG and is a constituent of the FTSE 250 Index. It is also a member of the FTSE4Good Index Series and the MSCI United Kingdom Small Cap Index.

TBC Uzbekistan is the leading digital banking ecosystem in Central Asia and part of London-listed TBC Bank Group. TBC Uzbekistan’s success is driven by its purpose-built tech stack, experienced international team and a consumer lending-led product strategy, supported by its first-mover advantage in Central Asia’s largest nation by population. The company continues to expand its innovative, best-in-class product mix, leveraging low retail banking penetration and a rising appetite for modern financial services among the country’s young, growing, and digitally savvy population. TBC Uzbekistan comprises three high-growth fintech businesses operating in Uzbekistan: TBC UZ, a mobile-only bank; Payme, a digital payments app for individuals and small businesses; and Payme Nasiya (Payme Instalments), a fast-growing instalment credit business. TBC Uzbekistan reached profitability 2 years after launch - a record time-to-profit among global digital banks, and has since scaled its user base to 18.4 million unique registered users. In FY24, the company recorded a net profit of USD 41 million, with its loan and deposit books up 103% and 74% YoY respectively.

Oliver Hughes is Chief International Growth Officer at London-listed TBC Bank Group, a leading provider of tech-enabled financial and banking services in Georgia and Uzbekistan. He is also a member of the Board of Tabby, a shopping and financial services app operating in the MENA Region. At TBC, Oliver oversees the Group’s international expansion, which includes scaling fast-growing and highly profitable TBC Uzbekistan, Central Asia’s leading digital banking ecosystem, in close cooperation with Nika Kurdiani, CEO of TBC Uzbekistan.

Oliver is a renowned executive with a successful track record of building and scaling fintech trailblazers including as CEO of Tinkoff, which was one of the first digital banks globally to reach profitability. He moved on from Tinkoff in 2022.

Earlier in his career, Oliver held key roles at Visa International, including as Head of Visa in Russia from 2004 until 2007. He holds a Bachelor of Arts (First Class) degree in Russian and French from the University of Sussex, a Master of Arts degree in International Politics from Leeds University and a Master of Science degree in Information Management and Technology from City University in London.

Ryan Zauk is the Host of the This Month in Fintech Podcast and Bay Area lead for the broader This Week in Fintech platform. In his day job, Ryan is an investor on the Ventures team at OMERS, the direct investing arm of one of the world’s largest pension plans with over $130Bn in net assets. Prior to OMERS, he worked in Morgan Stanley’s Tech Investment Banking team focused on M&A and capital markets. You can find him on Linkedin or Twitter.

Transcript

[00:00:00] Ryan Zauk The views expressed in this podcast are the speakers own and are not the views of this week, FinTech or any other person or entity. The content provided in this podcast is for informational purposes only and should not be construed as legal, business tax, or investment advice or recommendation, solicitation endorsement, or offering by me or anyone else for the sale subscription or purchase of securities, or for investment advisory services of any kind.

Hello everyone and welcome to today's episode of the This Month in FinTech podcast. I'm your host, Ryan Zauk, and today I'm sitting down with global FinTech legend Oliver Hughes. Oliver was the former head of visa for Russia that had a legendary run, a CEO of tin off one of the first true global consumer fintechs that helped inspire many more around the world.

After some geopolitical complications in Russia in 2022, Oliver unfortunately had to leave Tinkoff and now took on what might be his final FinTech chapter as Chief International Growth Officer at TBC Bank Group, a leading FinTech and banking services group in Georgia and Uzbekistan. TBC trades on the London Stock Exchange.

He is also on the board of Tabby, the dominant BMPL player that is allegedly eyeing an IPO pretty soon. Now, for many of our American, Canadian and Western European listeners, you may be thinking, why are we talking about Georgia and Uzbekistan and trivia question? Can you even name their capitals? It's tabi and tesh Kent, by the way.

So geography aside, their business is massive and Oliver pushes against traditional value wisdom that market size is just one piece of the business equation. It's really just about execution. Product and team. TBC just reported over a billion in operating income, growing 20% year over year with net income of about $480 million.

An ROE of almost 26% for my fellow banking nerds out there. That's a pretty good business. It's massive. And just getting started, and if you don't believe me on the room to run, we can look at Kaspi, which is a Nasdaq listed FinTech from Kazakhstan, and their revenues and growth are equally astounding.

Kazakhstan has revenues of over 4 billion growing 30% year over year with over 40% net income margin, and Kazakhstan's population is roughly half that of Georgia and Uzbekistan combined. Those are numbers that would put almost every single American Valley darling to shame. In this episode, Oliver and I discuss his journey to Russia scaling Tinkoff and how he ended up at TBC.

Why execution team, product, and sequencing are so much more important than market size. The crazy open banking technology, Uzbek. Dan, why it's probably the best in the world and a true FinTech builder's dream. The demographics, birth rate, and tech adoption in the countries that are aiding T BBC's growth.

The NPV framework he took from Capital One to tin off and now TBC and the insanely high hurdle rate. TBC uses. Lessons learned from launching phone plans through FinTech apps and vice versa, which is now gaining some new popularity after the launch of the platform gigs. How he's galvanizing the team around AI and much more.

Let's get started. Oliver, welcome to the this month in FinTech podcast. It's great having you on the show today. I know you can be a bit of a globe trotter for your role and background. So where exactly are you in the world today as we record this episode?

[00:03:32] Oliver Hughes, TBC Bank Group: Hey Ryan. It's really great to be on your show.

Thanks very much indeed for the invite. It's a real pleasure. So right now I'm fresh back from Tash Kent, which is where I'm working, Istan. I was in Singapore for a couple days before that last week, and the now back in Dubai, which is a home. Unfortunately, I spent a lot of time in planes.

[00:03:48] Ryan Zauk Oh man. That's quite a travel schedule and more intense than I expected.

Let's, uh, let's start with your wild FinTech journey across Russia. You had a long run at Visa and then Tinkoff, which eventually led you to TBC first. How'd you find Tinkoff from Visa? And what was this iconic Russian company that changed global FinTech?

[00:04:07] Oliver Hughes, TBC Bank Group: So I worked for Visa for almost 10 years. Uh, and you could say Visa was.

Uh, very tech driven, um, even today. Uh, so that was an amazing school, an amazing ride. And seven, eight years of my time in Visa was spent in Russia, uh, building the Russian business visa and laying down a lot of the infrastructure, the framework for what came later for which is me of. So I'm met an amazing guy, Ole Tinkoff, the founder of Tinkoff, who invited me to become the head of his business, the CEO of Tinkoff, back at the end of 2006.

And I started in early 2007, right at the very beginning when there was nothing, and that we built a credit card company. So basically what was what used to be called the Pure Play or monoline company? Branchless Direct to Consumer. Data. Data. So basically it about data. I worked with an amazingly small bunch of people, mathematicians, physicists.

Obviously some tech people, and we built quite a big business in terms of credit cards. And then the global financial crisis came and we became deposit funded because we couldn't continue to be wholesale funding because a global financial crisis obviously imploded all funding across the world, especially for an early stage credit card company in Russia, which was a difficult sell.

Anyway, as you can.

Built the full service retail and business, small business SE financial services provider, which went beyond finance as well into mobile, into lifestyle services, ticketing, travel, entertainment, you name it. I built basically one of the biggest digital banks in the world. Unfortunately to end my journey due to some geopolitical events that happened in 2022.

I spent a year or so in Philippines building a digital FinTech lender there with some colleagues for various reasons. I had to step back from that, also geopolitically related, and I thought, okay, I've got one more project in my left. I like being in something that I can build from a very early stage.

I'm a builder and build, hopefully something big. So I looked around very carefully and I was very kindly invited by the TBC crew to join them to build a digital bank in Uzbekistan from a very early stage, helping scale it and, and here I'm so it. Going through different geographies with, uh, some amazing people along the way.

[00:06:41] Ryan Zauk So, jumping back to Tinkoff, as you mentioned, you scaled it to one of the world's largest fintechs and a true pioneer building this before consumer FinTech was even really a thing. What were the key problems that Tinkoff was solving and the key lessons that you learned about building a disruptive financial services platform?

[00:06:58] Oliver Hughes, TBC Bank Group: Sure. Banking in

cl.

There was no choice for the customer. So basically you were given a card by your employer who'd done a deal with a bank over a whatever, a corporate loan, and it's called classic kind of payroll or salary project type of approach. You as a result, had very little faith in the bank, very low engagement.

You probably took your money out on payday through the ATM on your so.

Paradigm changing credit experience for customers with speed, convenience, high utility, great service around the lending products, particularly credit cards. But then we, we also tapped into self acquired retail customers who wanted a current account, wanted payments around that. We built very strong product, very strong.

Basically started building our own. So if we started on, uh, using off the shelf stuff, we realized that in order to speed up, reduce our time to market, come up with the right product offering, roll out features and services the whole time, integrate this in a way that customers liked and bring it all through delivery.

In the mobile app, we needed to do it to build our own tech because nobody else could do it. So in.

FinTech was even. Yeah, so probably started appearing

early teams. This took us into building vertical by vertical full service, um, cloud based banking solution, genuinely with no offline. We realized that we run to something because this is what customers wanted.

[00:08:50] Ryan Zauk And then you took these great learnings all and this great success at Tinkoff and eventually joined as we mentioned TBC for our listeners, especially in the West, what is TBC bank group?

Who do you serve and what is the overall structure? And then we'll jump into some specifics.

[00:09:07] Oliver Hughes, TBC Bank Group: TBC was originally a Georgian bank, still is. It's basically dualistic markets in Georgia. So there are two very good banks. One TC is better. Uh, some things. The other one, bank of Georgia is better. The other TBC is the biggest bank in Georgia, but both of 'em basically have 40, 45% each of everything.

TC is a highly profitable, smart commercial bank. We started as Abased Bank 30 years ago, so it's been around for a while and obviously, and.

So these guys produced 25, 20 6% ROE year in year out. Last year they made over $400 million profit. Yeah, in, in tiny Georgia, three and a half million people. So it's an amazing success story. But even more amazingly, around four or five years ago, they took the bold decision to go beyond their borders, move outside Georgia, but to do this.

So in, in essence, they built a, a digital challenger, but not to themselves in Georgia. They built a digital challenger to everybody else in a new market for them, which was, which was just opening up. So they're now two sister banks. So it's a London listed com group called, UH, TBC, banking Group, bank Group, PLC, listed in London Stock Exchange with two.

Maybe there'll be a third at some point.

[00:10:33] Ryan Zauk And then the success has been just amazing in Uzbekistan in just a few years, you've captured, I think 60% of the adult population as users on your platform, millions in net profit. What is the Uzbekistani platform that you have today? What are you offering your customers, especially that got at such high adoption in such a short period of time?

So.

[00:10:58] Oliver Hughes, TBC Bank Group: He used to work in Kaspi, various other institutions, including uni credited and lots of different geographies, an amazing bloke, and he and his core Georgian team. In the very beginning, basically a bunch of tech and product guys and a couple of digital marketers, they decided to launch a brand new player built from scratch with a.

FinTech said it wasn't cool to have a banking license back in the teens of the two thousands and, and are now around trying to get banking licenses because we know if you wanna be a bank, it's very difficult to be a bank. But anyway, it, it's taken some people a while to get there, but my colleagues understood that from day one.

So they got a banking license, they.

Completely separate organization with different people, different DNA, because I needed non-banks to build this. So it wasn't people who were plugged in from another banking institution, which would've probably were not taken off in the right way, uh, the same way. So these guys just did it absolutely right from the textbook.

And this is a textbook. The people at the time didn't really know about this. This is the Tinkoff textbook, the spy textbook, the new textbook. They're all different plays in different geographies with different heritage. But from a kilometer high view, the sequencing is absolutely right, and the sequencing is as follows.

Instead of launching with a transactional model, a liability led model where you have debit cards or digital wallets or deposits or whatever, where the more you scale, the more you burn, and it's very then very difficult to monetize. And the original team.

And,

and. Pay, which a two business for P two transfers, online payments, offline payments as well, which actually became a very big business. This something bought, bought with a couple customers and built it now into a 16 million customer base, which gives us, which we mentioned before, population of.

So it's a, a fantastic start and as I say, we're just starting, so we've only got a few products that we're basically putting all our focus on. This has taken us to break even up to two years, 27 million of of profit just for nine months this year. So it's obviously gonna be more for the year scaling, amazingly doubling the business every year, growing the customer base very quickly to.

These are people making transactions every month, not just now, and big plans for Uzbekistan going forward. So it's a fantastic story. Got it.

[00:13:51] Ryan Zauk Now focusing on Uzbekistan as a whole, I've seen some powerful demographic stats. You know, 70% smartphone penetration rate. 77% internet penetration rate, very young and growing population, it's a viable market for the kind of business that you're building.

Is that what makes this market compelling? You know, what are like the, the demographic shifts, regulatory bits or structural things that make Uzbekistan such a great FinTech market for you?

[00:14:17] Oliver Hughes, TBC Bank Group: So explain why it's a very cool, vibrant place to be. But before I do that, CASB in neighboring Kazakhstan has certainly put Central Asia on the map and quite rightly, absolutely amazing business.

An amazing story in, in a small country, 20 million people. But it just goes to show that size is not everything in terms of population. So there can be some very interesting markets, which are not the. Population plus where you can do absolutely fantastic business. So it doesn't have to be million, which is like received wisdom, which is why everybody's been piling into Indonesia, Philippines, Vietnam, Brazil, Nigeria, et cetera.

So I'm definitely someone who, who believes in this thesis that there are some overlooked underloved countries, uh, which deserve a lot more attention because you can build very viable, scalable businesses with the right execution. It's down to execution. It's not down to the number of people in the country, in my view.

To answer the question, Uzbekistan is the largest country in Central Asia. It has around 38, 30 9 million people last year, give or take a million babies were born. Just think about the number. So the sorted sort demographics are just incredible. The average age is 29 pyramid. Going down, obviously it was actually closed, more or less closed until around

change, but still a very d

regime. Basically open the country up once embarked on a path of reform, liberalizing the economy, and it's been working. So the GGDP growth has been five, six, 7%. Currently it's running just almost 7% on an annualized basis. As you say, it's a very online population. It's actually a fascinating fact. Maybe somebody, it's got the highest penetration of telegram.

[00:16:14] Ryan Zauk Telegram.

[00:16:15] Oliver Hughes, TBC Bank Group: Yeah. Wow. If you write, if you write to somebody in WhatsApp, in uh, Stan, they'll answer. If you answer in Telegram, they ping you straight back. Apart from all this mobility and all the other recruitments you'd expect from a very young population, it's also got an amazing ecosystem, digital payments ecosystem.

They're starting come in now, but for the last 30 years or so they've been now and, and that was because there were two local payment systems called huo and those, the equivalent of Visa, MasterCard, cards based systems, those cards based systems existed for the last couple of decades, and that is based on which the cards, environment cards business has been built istan by the local banks.

On top of that, amazingly, they built an API layer. Why? And this is where it gets a little bit spacey. People just don't believe me when I tell them this. They introduced open banking into Uzbekistan, and it's not just true open banking, the kind of stuff that Europeans haven't been able to build, not for wanting to try.

It's open banking on steroids, so it has full interoperability across the whole of the system. If a customer of one of the local banks wants to open a TBC account. They download our app, link their card from the other banks. They've probably got a payroll card. It's a very well carded, uh, market. 45 million or 47 million now bits of plastic.

So everybody's got a card, basically a debit card. You link that card to the app. You as a customer can see the balance. We as the bank can see your transactional history. Six to 12 months of transac, pull your account off system. So. Not just from your accounts in the bank to which you link the card or from which you link the card, but we can also, if you go delinquent, we can collect from any of your bank accounts across the whole system.

It's quite amazing. So this is a totally open system.

[00:18:24] Ryan Zauk I don't, is there any other region in the world that even comes close to that level? I've never heard that. I've

[00:18:31] Oliver Hughes, TBC Bank Group: seen anything across system. So very technologically sophisticated. Digitally savvy, digitally enabled because on top of this, a, uh, mobile mobile banking solutions stuff appear really, uh, BN.

Um, but it's also very data rich environment. So Russia is data rich. This is even more data rich than Russia. The access that we have in terms of e-government services, credit data, mobile telco data, tax data, very importantly, and obviously transactional data I've just been describing it's second to none.

[00:19:13] Ryan Zauk And I, I have to ask double click on this 'cause it's pretty mind blowing. Especially for, I, I live in the US and you, I'm sure you're familiar with some of the open banking. The troubles that we've dealt with here. How was it possible for this to be built? Was this a very nationalized effort? Who was leading this technical charge and actually making sure that all parties bought in to this style system?

[00:19:35] Oliver Hughes, TBC Bank Group: So because they had these, this equivalent of, of a local Visa, MasterCard, yeah. Huo.

Developed by local players. So it wasn't necessarily under the a of, of the state, but a lot of it was state driven. They were able to build an API layer across this system. So if you had Visa, MasterCard in, in a, in a country, you weren't able to build an API layer on top of that. So you had to build your own system on, uh, around the central bank, a faster payment system or type thing or whatever.

And then on top of that, you could build the API rails. But this, this is what, what makes this unusual? This is cards, rails. As a to a rails. So it's a very peculiar and unique environment, which has enabled all sorts of cool things to happen,

[00:20:19] Ryan Zauk right? It's so good for product innovation. And so going off that point, if to to open our eyes for some of our non Uzbekistani listeners, what is possible for people to do right now on the TBC and pay me platform?

[00:20:33] Oliver Hughes, TBC Bank Group: So we have two apps.

And then we have Pay Me, which is P two P transfers, online payments, utilities, mobile, topup, and some offline payments.

[00:20:45] Ryan Zauk And they sit as two separate apps in everyone's

[00:20:47] Oliver Hughes, TBC Bank Group: front. So one we from scratch, which, and one we bought. But then develop further, and now we're integrating them on the backend. And at some point we'll have to decide how much we integrate these two apps if we integrate them at all.

But there'll be certainly SSO and, uh, lots of services in common between them over time. So I, I mentioned the importance of sequencing earlier. Yeah. And, and coming out with the right products and focusing on doing one or two or three things very well. Yeah. Because this business is all about execution.

It's about choosing your battles. It's focus, focus on delivery, customer service, product development, and the interface. Lots of companies have either, let's say fintechs early stage, have made the mistake of trying to do too much too quickly and then they do everything badly, or trying to do too many things and running outta funding because if you are.

Parts of world. There's a scarcity of capital. This applied to, this applies to, to Uzbekistan in general. Not to tbc because we've got a very rich sister who us, which is nice. But you know, just the mentality that we have is that you have to be very disciplined. So you pick one or two things where you execute the hell out it and do very well what used to be called the monoline.

But monoline is probably a bit of a, an over one word these days. So TTBC, us. Deposits to fund digital cash. So we have a very large number of online leads who are coming to us through Google, Facebook, Yandex, whatever it might be in Uzbekistan and various sort of channels. We're getting actually over a million leads per month turns into downloads, and we take them then through the, uh, the funnel in order to give them digital cash at the end.

So there are main two, the two main pillars. Payment is p2 by and large, so that covers transferring money to your mom. Some remittances. But it's also offline payments through qr, so a QR off the of cards rails. So it's rather unusual and we've added lots of services to that as well. So you can now take TBC loans.

We have ticketing as in concerts and cinema and that kind of thing. We have travel in there. So we're trying to build out an ecosystem of services. And we also have an offline installment loan business, which is called Pay. So it's Sharia Compliance Loans. Which basically b2, B2C business, so people take out loans, interest free loans partners, and we're taking that online.

So that's what we have today. But literally over the last few weeks and into the coming couple of months, before the end of the year, we've launched a credit card. We've launched a very high value debit card. So if.

With lots of bells and whistles. Super customer service, excellent onboarding and and UX through mobile app. That kind of product in terms of debit card, something we're rolling out, and that's already, it's called Salon, CBC Salon. We're launching SME, so accounts for small business in a month or so. Time and off the.

The true BN products. So paying for type product, which will be embedded financing inside Pay Me, which is the P2P business. So lots of stuff going on as we build this out vertical by vertical and develop a full retail slash SME offering in the cloud.

[00:24:20] Ryan Zauk And then you talked a little bit about the prioritization exercises in the strategic thinking that's required to sequence these products.

Are there any. Kind of guardrails that you used internally or metrics that you track or think about when you're deciding on how to prioritize a roadmap as a leader?

[00:24:37] Oliver Hughes, TBC Bank Group: Sure. Yeah. So there's a bunch of us, the kind of business core who get together on a regular basis and storm all of this. There are some things which are driven by customer experience, even brand equity, building some things.

Let's say launch a high value debit card, which burns money in the beginning because it's a very high value product. If you don't have a way then to monetize that customer, because that's the way that we were talking before, the neobank are burned rather in different parts of the world because they have no, the more they built up their active customer base, the more the scale, the losses, and the more private equity money they burnt.

When the stopped, they didn't have any private funding and, and they were lost a little bit because they had no means of money izing their customer base. Ultimately, we're there to make a profit. We're there to bring great things to customers, influence the environment in which we work, hopefully have a positive impact on society.

Change the face of banking without sounding too pompous about it. Competition, which is.

All make money. We're a bank. We have to be, we have to a sustainable business model, have profitable. So one, the ways of managing those metrics is to apply what we call the based approach. This is something straight out Capital One's book we in. We that from them implemented it far so.

And it was the framework within which we, we, we took all the decisions across the whole of the business and we're applying a similar approach in Uzbekistan. However, there is an important difference in Russia, in syn of, we used a hurdle rate of 30%, so that means that the minimum ROE that you could have from the product to which you're applying the NPV model had to be 30%.

So

30%.

Cost of equity is a bit higher, and it's a newer market. We have a hurdle rate of 45%, so 45% minimum baked into our NPV decisions on the, on the lending side at the moment, which sounds crazy, but it's true.

[00:27:02] Ryan Zauk And then one product I want to touch on before we move to the next section is, uh, there's been a, some request as, as well from our listenership to explore.

Mobile SIM cards and the mobile opportunity within digital banking. We saw Revolut make an announcement pretty recently entering this market. Nubank just entered this product as well, powered by a platform called Gigs. Is this, it's probably unfamiliar to a lot of folks as a good growth lever to be pulling.

I believe you have deployed this at Tinkoff in the past and maybe on the roadmap for what you're building now. Why is this such a compelling, a bolt-on product to increase arpu?

[00:27:41] Oliver Hughes, TBC Bank Group: It's actually quite a difficult area, and I don't think it's got a very simple answer.

[00:27:45] Ryan Zauk It seems incredibly

[00:27:46] Oliver Hughes, TBC Bank Group: difficult. Exactly.

So set compet. In, in the names, some of the names you've mentioned led by consumer lending and then moving into very interesting transactional services and beyond. But this is going even further from your core. Yeah, so it's not gonna eCommerce marketplace that is really very far from your core or taxi, but it's going quite a long way because it's enough.

It's a mobile virtual mobile operator, which has very different tech stack, very different approach, different way of servicing customers. A mobile operators tried to go into financial services as far as I've seen, completely unsuccessful everywhere. Even Orange in France. I think they recently closed the bank.

They're in the process closing. It hasn't worked for them anyway, and I have working an explanation as to why that was the case, because they're mobile centric in their.

Financial life, they don't think about the mobile account. They wanna deposit a way of saving or way of investing or a loan. And that doesn't lend itself well to, if you like, the mobile infrastructure. So why would it work for financial services players going into mobile services? It was a big ask. And in fact, quite a few, uh, companies over the years have tried it and failed from the financial services side was one of the first to do this.

There was actually two in Russia who were the largest. Digitally transformed State Bank, an amazing player, but now behind the new Iron Curtain in, in, in Russia. And, uh, both of us launched MVNOs at the same time. I would argue that Tinkoff was more successful in it, and the initial idea was that we had a very strong brand, very strong digital franchise who were associated with great service.

Typically, mobile operators do rubbish of driving.

Here we are. The dog's bullocks. We can do it. Well, it didn't work in the way that we thought, so we didn't attract tons of customers at a low CAC who suddenly came onto our financial platform through an ECI or through a actually physical sim in the beginning, and we actually had very high cac. And it's a very low ARPU market anyway, which is why I said there's a difference between different markets.

I dunno about Brazil, but I suspect it's higher ARPU than for mobile services than Russia. So we had low ARPU and terrible economics and we actually thought we'd close this. Well then we, we realized it was a way of cementing the relationship with our existing customers. So by that time we had a big customer base, probably about 12, maybe 15 million active monthly active customers.

And we cross sold our EIM service in a very frictionless way because you didn't need to do anything, you just downloaded it to the phone and, and tied them in with loyalty, with our debit card, with our current account product, um, with cool old AI AI solutions. So bot calls. A customer engagement. So basically, the customers who sat on our core current account called PL was called this, and on our MVO product, actually the lifetime value that we got from them was much higher.

The PU was much higher. The longevity of those customers was much like much greater. So it turned out to be a superb relationship tool, which is not original thesis, but I hope this works out for.

[00:31:19] Ryan Zauk Well, let's hope so. And then another wave that we've all been thinking about is, of course, artificial intelligence has been a big part of FinTech.

Folks have seen the Klarna announcements where they're trying to rightsize their sales, marketing, customer service. Where have you seen AI really applicable in what you've built so far with your work at TBC, and where do you think is a great opportunity for innovation for you to bring it forward?

[00:31:44] Oliver Hughes, TBC Bank Group: We've started building this in-house.

It's a big investment. But we firmly believe that this next gen kind of banking experience, which is a dialogue based assistant initially in the mobile app, then

is. And that's easy to say and lots of people are saying it, but it's difficult to do. Yeah, because you've got legacy, you've got tons of priorities, conflicting priorities, meeting your resource. We have a blank piece of paper in front of us because we're a young company without legacy. We have our own tech stack and our own, uh, tech resource.

We, we have tons of data, tons of customers.

We're doing stuff on, on the Gen AI side, which is efficiency, drive driven, driven stuff, which you, which you mentioned from Klarna, where they've got, it looks like real gains in terms of reduction of head count or let's say slowing the growth of headcount. We have the same, we have a collections spot.

We're developing a service spot, which we're, which we're rolling out the next couple of months. We have a sales bot, proper natural language. You can't talk to a bot. As well as building the lm and we built the, so we built synth in Russian. Two main language, a couple of other large languages, TA and future.

So the next stage is driving this new experience. So how you engage with your mobile app. You click a button, you can talk to it, you can send a message to it, you can chat as in type and chat and do whatever you like. If in a banking interface, um, very clean, very simple, but gives you the, even this a can trouble with you from to another app.

We'll see whether that that kind of sci-fi idea comes true, but say it's quite intriguing and I like it. So this is really what we're building now and a lot of it we've already got in place. We've got the platform in place and well most is coming on stream next year. It really gets me fired up.

[00:33:56] Ryan Zauk That's amazing.

And yeah, port the portable AI would be an incredible feature that I don't think many people have seen yet. So fingers crossed, we'll see. Yeah, knock on wood. I won't hold you to that one at least yet. And then last question before we jump to the rapid fire round. We've talked about so many great products and the platform, especially the team that you've built at TBC.

What should our listeners be on the lookout for, uh, in the future and what you hope to accomplish over the next few years with this great platform?

[00:34:23] Oliver Hughes, TBC Bank Group: Sure. I should just say a very brief word about the team. This team has built amazing FinTech stories and digital banking stories. Former Soviet Union, so Ukraine, Georgia, Kazakhstan,

national. Inside our. Geographies, I think, if I recall, and these people worked in Southeast Asia with me, in the Philippines, Vietnam, all over the, it's one of the best teams in the region for sure, in digital and certainly digital banking. We're building a big store in Astan. We'll build it out carefully, vertical by vertical, and make sure that we have absolute kick ass UX customer experience.

Be proud of showing in any market in the world, not just in, uh, central Asia, we'll, sometime in the not too distant future. Start building in market number three as well, uh, which we haven't decided where it'll be. It probably won't be in our current areas, central Asia. Somewhere little further afield and hopefully start disrupting and making a positive impact there as well.

[00:35:33] Ryan Zauk Wow. And it's funny, it brings me back to something you said earlier when we talked about, especially the population of Uzbekistan and some of the neighboring countries. I remember we did an analysis for, uh, a large bank exploring international expansion and our first filter. Population and we're like the only, nothing over under a hundred million we're going to even consider.

I assume that is not a barrier for your next market, but are there any, you know, key traits that you're looking for when you decide what number three will be?

[00:36:00] Oliver Hughes, TBC Bank Group: So it's gotta be a place where our amazing team, I'll be willing to relocate to or spend a lot of time in. So it's gotta be a place that has certain levels of, with certain infrastructure.

Banking regulation, and by the way, very progressive banking regulation. It's a very sophisticated market. Further up the curve than you would expect for level development, consumer lending, online connectivity, obviously universal supply of electricity, basic walks.

In banking

there. This kind of business in the way that we, we see it.

[00:37:06] Ryan Zauk Uh, I'll withhold from launching any guesses out there, but I'm excited to hear what uh, next market will be. Almost

[00:37:12] Oliver Hughes, TBC Bank Group: you. You can try, but I dunno myself.

[00:37:14] Ryan Zauk Um, alright. Well, Oliver, thank you so much. You have reached the final part of the episode, which is the rapid fire question round.

We have a handful of questions for you. Just five 10 to SAT can answer each and more on the personal side. What is the first job that you ever had?

[00:37:29] Oliver Hughes, TBC Bank Group: I stacked. Huge bags of cement, 25 kilogram cement on shelves in BQ, which is a DIY store in, in the uk.

[00:37:38] Ryan Zauk Oh my God. That's character building. I love it.

[00:37:40] Oliver Hughes, TBC Bank Group: How old were you doing that high school?

[00:37:42] Ryan Zauk Your secondary school? Uh,

[00:37:43] Oliver Hughes, TBC Bank Group: 14, 15.

[00:37:44] Ryan Zauk Ooh. All right. What about, what is the last job that you would want?

[00:37:48] Oliver Hughes, TBC Bank Group: I would like to be a volunteer archeologist, excavating.

Stone circles.

[00:37:57] Ryan Zauk That is extremely specific. Have you had experience with this in the past as a volunteer hobby?

[00:38:02] Oliver Hughes, TBC Bank Group: I have. I like it. I like stone hinges, stone circles, stone, henges the most famous, but that's probably the most overdone. Of course. I like course all the other three or 4,000 megalithic sites around the uk.

[00:38:12] Ryan Zauk Oh wow. It's awesome. Alright. What is the best place that you've ever traveled to?

[00:38:16] Oliver Hughes, TBC Bank Group: Very difficult. Probably kaka in the far east of Russia. Shetland is very good as well. Kaka snow for skiing. Mud pools, volcanoes, ocean, amazing wildlife. But it's just a mind blowing place.

[00:38:33] Ryan Zauk Love it. And what is next on your travel list since you're so well traveled?

[00:38:37] Oliver Hughes, TBC Bank Group: Mm. In the not too distant future, uh, the family, uh, is gonna go to Laos.

[00:38:42] Ryan Zauk Oh, I amazing. I actually went to Laos in 2019. Loved it under the radar. And just as good as Cambodia, Thailand, Vietnam, which I think get a lot of the hype in that region. Loved it. Amazing food. And then on the food note, what is the best dish that you've had in Uzbekistan?

Unique to the region?

[00:38:59] Oliver Hughes, TBC Bank Group: So Uzbekistan is a nation of food is, wouldn't believe it, but the level of in general, and especially the meat just outta this world. So one of my favorite foods, I'm from the north of England, where we like pies. And in those Stan, they've got fantastic pies. They're called Sosa about lamb and, uh, beef, chicken, but the, probably the lamb, Suma is one my favorite.

[00:39:24] Ryan Zauk Going back to you as a leader, what is a leadership mate mistake that you continually make in your career?

[00:39:32] Oliver Hughes, TBC Bank Group: I like to think there's not many of them. One thing I'm not very good at is. Brand marketing. I don't like it because I don't really get it. And the reason why I don't get it is because I can't measure it.

I like doing marketing stuff that we can measure. So digitally it's fantastic is you can measure everything. And so I listen very carefully to people who do understand brand marketing. So my partner Mika Cordani, and obviously in Tinkoff, Oleg Tinkoff himself, he's just a.

It's not stronger point at all.

[00:40:06] Ryan Zauk I actually may might have somebody that you can talk to. I was at our shared friend, Miguel Arma, his Gilgamesh Summit in New York a couple weeks ago, and he had a phenomenal speaker talk about brand marketing in the age of ai, where it's gonna be even harder to track attribution and probably the mo, the data that is training perplexity chat, JPT and the like, is going to be continually come from.

More forums like a Reddit or YouTube comments as opposed to anything sponsored. And so your brand and customer love is going to matter more than ever. I might have to send his presentation over to you. Then last question that we always ask, who would you like to see on the show next?

[00:40:44] Oliver Hughes, TBC Bank Group: I think Mickey Malcolm from IC Capital.

I, I don't think he really likes doing this kind of thing, uh, but he's just a truly amazing,

[00:40:51] Ryan Zauk yeah, he's a, he's a hard one to track down for this kind of stuff, but he is incredible. Awesome. Oliver, thank you so much for coming on today's episode of this Month in FinTech podcast. We are very excited to share your story as well as tbcs with our global audience.

Very excited to get this one out.

[00:41:07] Oliver Hughes, TBC Bank Group: Thank you so much. Been a pleasure to talk to Ryan. Really cool. Thank you.

[00:41:14] Ryan Zauk Thank you for listening to today's episode of the This Month in FinTech podcast. If you enjoyed today's episode, please like, follow, subscribe, or rate us across your preferred podcast and social media platforms. Lastly, I'd like to thank our editor Evangel Marco for his great work on our episodes.

Signing off. I'm your host, Ryan Zauk.