Brett King: The Future of Everything

Jennifer Tescher:
Welcome to EMERGE Everywhere. I’m Jennifer Tescher, journalist turned financial health champion. As founder and CEO of the Financial Health Network, I’ve spent my career connecting forward thinking leaders to the growing fin health movement. Now, I’m sharing these conversations with you. Discover how these visionaries are challenging the status quo and improving financial health for their customers, employees and communities.

Brett King is no stranger to the podcast world. He’s the host of Breaking Banks and the author of many books. And he has spent much of his career delving into technology and innovation that is disrupting the financial services industry. Now, in his new book, The Rise of Technosocialism, Brett is stepping outside the financial services sector to look at how AI, climate change and rising inequality are driving global transformation. Brett makes the case that harnessed responsibly, technology can lead us to a brave new world. Brett, welcome to EMERGE Everywhere.

Brett King:
It’s great to be here. It’s like we’ve both done so many of these things from different sides of the microphone, but this is a wonderful opportunity. I’m very grateful for it, but it’s just great to be talking to you about this topic, because I know we’re both going to get so much out of it.

Jennifer Tescher:
I agree. And I feel like, oh my God, it’s finally happened. I’ve gotten the man on my show. So thank you for joining me. I’m really excited. There are so many things to talk about with you, Brett, but obviously I want to start with your new book. It’s called The Rise of Technosocialism: How Inequality, AI and Climate will Usher in a New World. Wow, there are about 5,000 important things we could be talking about in this book.

Brett King:
Absolutely.

Jennifer Tescher:
I had the opportunity to read an advanced copy. It’s incredibly thought provoking. But let’s start from the very beginning, what is technosocialism?

Brett King:
So to frame it, what we actually look at is four potential futures for humanity in the book. We look at the problem of inequality and economic uncertainty, which is rife today. And we look at how humanity might get through this next period, particularly with artificial intelligence and climate change and what the ultimate outcome would be from an economics perspective, sociopolitical, socioeconomic organizing principles. And also-

Jennifer Tescher:
So it’s a little like a scenario planning approach?

Brett King:
Yeah, scenario planning forecasting. And we mapped out four potential futures. So the axes of that were inclusive collective economies versus exclusionary individualistic economies, and then chaotic versus planned futures. And so they’re the four quadrants, which ended up as rejection of science and technology, because of its effect on labor participation and other issues. So we call that the latter stand scenario in the top left hand corner. And then the bottom left, we talk about failed states where we just waited too long to fix problems like climate. And then on the planned side, the exclusionary scenario, which we call neo-feudalism and then technosocialism.

And of those four scenarios that are likely, we argue that technosocialism is the most optimistic, an optimal outcome for humanity as a whole. And so that essentially, it’s not a political movement as such as more it is a collective movement for the economic benefit of all humans.

Jennifer Tescher:
Okay. So if it’s not political and it’s not economic, is this more of a philosophy perhaps?

Brett King:
Absolutely. Bang on. So it is. It’s a philosophical document ultimately is what is the purpose of humanity? Why are we here? What is the optimal form of humanity? If we’re here on the planet, then what should we be doing? And ultimately, what role does the economy work and these other things play in the future existence of humanity? And just one simple measure of this as an example, we talk about economic realignment, the purpose of the economy being better aligned with the needs of humans today.

And so when you look at economists over the last 300 years from Adam Smith’s Wealth of Nations back in 1776 through to Friedman or Thomas Piketty or whatever, economists generally measure the activity of an economy with things like GDP growth, market returns, market value, stock market prices, trade balances and surpluses, those things, and by that measure, the US is unarguably the most successful economy the world has seen today. But if you look at what an economy should achieve for its citizens, namely providing for the basic needs of its citizens, making its citizens happy and healthy, particularly during the pandemic with the massive inequality spike that we’ve seen, you could argue that the US has been a demonstrable failure as an economy.

So as inequality becomes more of an issue and as artificial intelligence unhinges labor participation from basic supply and demand economics, increasingly we are going to be asking the question, what should the economy do for its citizens? And that comes back to a very philosophical question about why are we all here and what’s the purpose of all of this?

Jennifer Tescher:
So maybe instead of a futurist, I should be calling you a philosopher?

Brett King:
A philosopher futurist, perhaps, in the style of the philosopher king of Socrates and Plato, but yeah, I don’t mind that.

Jennifer Tescher:
Yes, exactly. So in the book you write, the 21st century is going to be the most disruptive contentious period humanity has ever lived through. That’s a really big statement. And you just briefly touched on some of the drivers of why think that’s so. I want to go a little bit deeper into those, because there’s four drivers in particular that you call out in the book, inequality, pandemics, AI and climate change. And I wonder if you could just spend a little bit of time on each one of those helping us understand the trends you’ve seen and why that makes you think that those are going to drive us to such a level of disruption.

Brett King:
So as I discussed offline, Jenn, I started writing this book long before the pandemic. It’s been many years of research. And what led me to this was I wrote a book in 2015 called Augmented: Life in The Smart Lane. And one of the things that I was left wanting at the end of that book was how society would adapt as a whole, how our economics, politics and so forth would have to adapt to highly automated societies, which is clearly the intent of where we see things going. But in parallel with that growth that we’re seeing, we’re also seeing an increase in economic uncertainty. So one of the things we started out the book was the loss of the American Dream, the fact that in the 1960s and 1970s, the great hope was that if you worked hard, you’d provide a better future for your children. That’s no longer guaranteed in today’s system, primarily because of problems like inequality.

But then the pandemic hit. And the pandemic gave us so much material for this topic, because we saw the pandemic accentuating equality, we certainly saw large portions of the population suffer economic uncertainty. And then when you realize what AI is going to do to employment and then you see the impact of climate change with food scarcity, eco refugees, displacement of large groups of populations, the potential for that economic uncertainty is incredibly high. So how do we resolve that? Well, you can’t resolve it in the current system, because the current system has essentially created this economic uncertainty.

So then what are the levers that we can introduce into capitalism, for example, that give us better controls over that outcomes. And again, what are some of the economic principles at play? Those were the questions that really, we started out the book trying to find an answer for. But there was some really interesting early signals that we started to get in terms of data that led us to this understanding of why economic is so critical for social cohesion. So economic certainty is so critical for social cohesion. And that is that if you look at the number of protests we’ve seen globally in the last 20 years, we’ve seen an increase of 200% in terms of the number of protest events from the average of the 20th century, but we’ve seen 1000% increase in the participation in those protests.

So when you look at Bernie Sanders, AOC, and the modern socialist movement there, and you look at the populist movement, Trump, Johnson, Bolsonaro and so forth, these are all indicators of economic uncertainty. The people are looking for a solution, a way out of this. And that’s really what we wanted to tackle in the body of the book.

Jennifer Tescher:
Should we read this book as an indictment of capitalism?

Brett King:
Well, I think capitalism was the best system we could come up with at the time. It doesn’t necessarily mean it’s the best system we’re ever going to have. The line of logic or reasoning that Richard and I use in the book in respect to this is if you look 10,000 years in the future, do we expect that as a society, we will have made advancements in terms of the way economics work and capitalism works and so forth? And the answer’s obviously yes. We would look to improve on the system. And so if that’s the case, why do we have to wait 10,000 years? And so if we look at some of the core flaws in the system today, one example we use in the book is air quality.

Now, even if you don’t believe in climate change being manmade, there’s very little arguments that the climate is changing. It really doesn’t matter when you come down to whether it’s manmade or not in terms of outcomes. But if we just take the issue of air quality, since the 1970s and 1980s, pollution has been a significant problem, eight to 10 million people die every year as a result of poor air quality. We obviously have problems with water quality in large parts of the world as well, even here in the United States. But if we examine that and we say, “Well, why haven’t we fixed air quality?” We have the technology to fix it. We could have shifted to more renewable forms of transportation and energy production, for example, many years ago.

But let’s think back in the 1980s, the largest companies in the world were fossil fuel companies. And so the market was rewarding those fossil fuel companies for putting carbon and pollution into the atmosphere, because it was generating returns. And so can we expect that same system that has rewarded behavior that’s productive for humans to then reverse itself? Well, the arguments for capitalists are, well, as soon as energy production costs come down and so forth, then the market will ride itself. But in the meantime, 10 million people are dying every year, because of this problem. And so this is a problem of prioritization.

Now, in the past, we didn’t have all of the options that we have today in respect to energy production and transportation, but we do now. So the question is why aren’t we rapidly retooling the planet to improve air quality? And it comes back to the market is not incentivized to do that. And so the that’s the core problem with capitalism right now, it doesn’t have a social conscience. It is purely driven by these market forces. And when it comes to things like inequality and making sure people are happy and healthy, that’s really an after effect that’s argued by economists.

Jennifer Tescher:
It’s really in many ways of collective action problem, because the market rewards individual success as proxied by financial returns. So it feels like it all comes back to what gets measured gets managed or what gets incentivized gets done.

Brett King:
Well, it comes back to again, philosophers in the book. And I talk about Aristotle saying that the purpose of humanity is for humanity to thrive. The problem with the current system is that a very small percentage of humanity thrives based on the current system. So it’s not optimal for all humans, it’s optimal for a very small group of humans. And increasingly the group of humans that get the optimal benefit from the economy is shrinking. And it’s going to get worse with the implications of AI and climate. So that’s really at the core of this. The economy’s not working for everybody, and that’s what we have to adjust. And tweaking the system in respect to capitalism, so it achieves that is really critical for the next 30 years.

Jennifer Tescher:
So I think a big part of the way you and your co-author think we’re going to get there is with AI, that AI is going to change life as we know it so significantly, that we’re going to be able to contemplate moving from a more individualistic society to a more cooperative or collaborative society. I will admit, I’m slightly skeptical about that. So talk to me a little bit about now AI and why you see that as such a driver of at the end of the day, what is the culture of this country in particular?

Brett King:
Well, the great thing about highly automated societies, which AI gives us a potential for, is that it is economically very right wing, because we can reduce the size of government, we can reduce the cost of government and improve resource allocation. And in doing so-

Jennifer Tescher:
Give an example of that. How do we shrink government with AI?

Brett King:
So let’s take, for example, one example we use for the US system is healthcare in the book. So we demonstrate that by the year 2040, that we can reduce the total cost of healthcare in the United States by approximately 70%, seven zero. And we can do that through a number of technologies. First of all, 40% of medical diagnosis today in the United States are wrong. So you’ve got a one in two chance approximately of getting a correct diagnosis. The use of artificial intelligence is being shown to improve the of diagnosis considerably in fields CAT scans, MRIs, X-rays, oncology and so forth. So that’s one area.

40% of the costs of the current healthcare system today are administrative costs. So we can use robotic process automation to improve or reduce those costs effectively down to zero over time. Then have gene therapy, which can eliminate diseases from the genome. We shift to a data based approach in respect to health maintenance instead of analyzing or diagnosing symptoms and then addressing them. So all of those things together dramatically reduce the cost of healthcare. So if now we can produce a healthcare system, that’s 30% of the cost of the existing system, we can give healthcare to everyone for free at a fraction of the cost of today’s system. There shouldn’t really be a political argument over that once the costs are aligned, because the biggest argument today for universal healthcare is who’s going to pay for it.

But broadly, most Americans agree that healthcare should be available to all of the population at low cost or free. So that’s a really good example of where automation is dramatically going to improve the situation. But at the same time, the intent of AI has always been to eliminate humans from the workforce. Ultimately, we can talk about solving the biggest problems of the biggest questions in the universe through super intelligent AIs, but that’s not why we’ve dreamed about creating robots and automation. We’ve dreamed about that to have these machines or algorithms that serve humanity and make our life more prosperous so that we don’t have to work.

So that’s the design of AI or the core intent. So you get to a point at some point where it’s going to uncorrelate or unhinge labor participation from classic supply and demand economics where demand in the market or in the economy is no longer generating jobs for humans. And that is something that changes the whole game. It changes the role of work in society, changes the way we think it about economics, it changes the way we think about wealth. And that is obviously going to take a few decades, perhaps 100 years to really change our psyche and change the way we grapple with that, but that is unashamedly the intent of AI.

Jennifer Tescher:
Wow. That’s a lot to take in. So you talk about AI a lot in the book and frequently I find the caveat or the parenthesis that says, but AI can also replicate existing bias, for instance, or AI isn’t necessarily a tool that only does good, it can also do bad. And this is obviously a huge topic of conversation right now. And in the ladder stand version of how we might end up, you talk about a rejection technology and AI and science as being what leads us to essentially not make further progress. Is there a version where yes, we accept technology and AI and science, but we recognize the need to put limits on it. How are we going to ensure that AI is for good given that when AI is for bad, it can be very, very bad.

Brett King:
Yes. Well, this really comes back to framing ethics and regulations around the use of AI. And we argue that this again is not something that should be a national policy, it certainly should not be the purview, for example, of the bank or financial regulators alone. AI is a national pursuit and a national problem in terms of the way it impacts society. And so artificial intelligence needs to be regulated at a nation level as a minimum and there should probably be regulatory alliances globally in respect to the use of AIs, because we are already using Chinese AI in our everyday life when we use certain apps like TikTok as an example. People around the world are using US AIs with Facebook as an example. And so we really need to think about regulation of AI and those standards globally.

And that’s a key element to the safe delivery of artificial intelligence. When you don’t have that regulation, you are going to get accentuation of inequality, which is one of the key problems we’re trying to address in the book. Now, where we talk about the ladder stand scenario and part of the reason for rejection of technology is a political view that humans must remain in the workforce, because that’s the only way a living wage can be produced. Whereas this is why many entrepreneurs like Elon Musk and Bill Gates and others talk about the fact that universal basic income is inevitable if we have highly automated societies, because people won’t be working.

And so one of the points of rejection of artificial intelligence may… Well, we don’t want to pay people a UBI. That’s politically untenable. It’s something we can’t agree to. And so we have to keep humans in the workforce as a result of that. So maybe we restrict the reduction of people that can be displaced by a AI or maybe we force companies to pay a tax on AI for job programs that create new jobs. The only potential real growth industry that we see out over the next 20 to 30 years that could replace the jobs lost by AI ironically is climate, building seawall defenses around New York and Miami and Toronto and Shanghai and Guangzhou, carbon sequestration and extraction technologies, climate resilience for our infrastructure, so that our subways don’t get flooded, our electrical grids don’t fall apart. This is going to be a massive employment opportunity in the future.

And so the way we tackle that in the book is we say, well, let’s tie all this together, and if you want universal basic income, why not put a requirement to do two years of national service on these types of climate mitigation programs as an example, and then you can qualify for UBI, because we’re factoring in that AI can produce so many advantages into the system, regulated AI, that we will accept the unemployment effects that come with it?

Jennifer Tescher:
So one of the things I love about this book and I love about you, Brett, is that you’ve always been someone who has been trying to connect the dots across trends, across markets, across ideas, across geographies. And I think one of the reasons why we get along so well is because you know that I also believe that everything is connected and that if we fail to see those interconnections and create cooperation and governance structures to encourage them, we’re going to miss it, we’re not going to be able to see people in their full complexity and ultimately make things better. I wonder sometimes how much of the fact that you’re an Aussie and have traveled the world influences your thinking in this way? I wonder if you could talk a little bit more about that?

Brett King:
I think a lot. I’ve lived around the world, obviously was born in Australia, but fairly early got the travel bug. My dad had a travel agency for a period of time. And so that obviously helped. But I left Australia in ’99. I lived in Hong Kong for six years. I then moved to Dubai and now I’ve been in the US about 11 years. And I’m in the process of moving to Thailand right now. And so I am unashamedly a citizen of the world. And in that, I don’t see a concept of the greatest country in the world as an example. Australians for many years have called themselves the lucky country. Americans say, this is the greatest country in the world. I don’t believe that, I believe there are fantastic and incredible elements in each society that you go to. And so I see the world as collective form of humanity. You can look at the world from out of space, you don’t see national borders.

And the argument we put in the book is if you actually look at past economic successes or when we’ve made advances as a species, we do so much more rapidly when we work together rather than when we compete against each other. And so the Human Genome Project is example of that, the Apollo Project in the 1960s and 70s, the Great Wall of China, even the world wars, particularly the II World War, massive technological advancements made, because on each side, the economies were focused very specifically on advancements to attack that problem. So when you look at the periods of time humanity has made the greatest advancements it’s when we work together.

So again, when we look at the failures of the current system, part of that is that the system is built to create competition, competition at an individual level, at a corporation level, at a market level, nation against nation, tribe against tribe, and ultimately, that is cutting off our nose to spite our face. It’s inefficient as from resource allocation, it creates false scarcity, it creates division and animosity, and all of those things are counterproductive to the best outcomes possible for the species. And so that’s philosophically why I think collectivism, particularly with problems like climate, we cannot solve that at a local government level. There’s no such thing as a national climate change policy that’s going to work, because if the next nation next door doesn’t have the same policy, then it doesn’t work. We can’t solve these problems.

The problems of this scale, like AI, role of work, climate, we cannot solve these as individual nations. We have to do this collectively. And the reality is all the borders, the money, it’s all abstraction. At the end of the day, we are brothers and sisters on this planet as a species together. And if our species is going to survive, we have to learn to collaborate and work together more effectively. And that’s my personal belief, and that’s my mission in producing this book.

Jennifer Tescher:
So we’ve known each other now for probably a decade. And when we first got to know each other, and for much of that time, you have been known as really a tech enthusiast and specifically a FinTech enthusiast. I think it was your first book, your first book was Breaking Banks.

Brett King:
Well, Bank 2.0, actually.

Jennifer Tescher:
Oh, the first one was Bank 2.0?

Brett King:
Yeah.

Jennifer Tescher:
Breaking Banks is the name of your podcast.

Brett King:
Correct.

Jennifer Tescher:
Right. And your third book. And Bank 4.0. And you were the guy they put on stage at banking conferences to say, no banks, you’re yesterday’s news, and there’s something new here that is better and represents the future. Where did that come from? You’re not a technologist by training per se. So say more.

Brett King:
My first job, the start of my career was as a coder or programmer. So yeah, I hark back to being a technologist. But in reality, I was probably a frustrated science fiction author.

Jennifer Tescher:
Exactly.

Brett King:
But one of the things that happened early in my career was I found I had a fairly unique skill or a rare skill back in those days, which was the ability to communicate technology to business people and the average person and the ability to communicate business needs or outcomes to technology people and to bring those to groups of people together. And so that has served me very well from a career perspective. But the first book ironically, was an outcome of the last financial crisis, because I had a digital transformative business that I was running, a strategic consulting business. I’d headed up Deloitte business practice back in the dot-com era, and then I worked for a digital ad agency, a company called Motor Media, one of the early ad agencies. And then went independent.

But then the financial crisis hit. And I had a couple of businesses. I had a financial services training business, where we were putting people through training courses on risk compliance, eCommerce, those things, and private banking, wealth management. And that business collapsed overnight. We went from five million in revenue to 300,000 in revenue in a single year. Because of the financial crisis, everyone cut their training budgets. So I took a couple of years off to write Bank 2.0, because at the time I’d been spending a decade in the trenches trying to get internet banking transformation happening in many of the major banks, HSBC, Standard Chartered, Citibank, et cetera, working with them on global dotcom strategy and just running into this wall of apathy, no digital, it’s never going to change, it’s never going to impact us.

And I realized there was probably hundreds of thousands of guys like me facing that same frustration. And so I saw a niche to write a book about helping people understand that change was going to pan out. So again, the futurist piece coming in there, a bit of Sci-Fi, and then some realistic approaches in terms of how that transformation could work. And of course, the rest is history, as they say, that launched my career as a speaker and a thought leader in the space. It led to the creation of movement, the first mobile challenger bank in the world. It led to the radio show in 2013, Breaking Banks. Around the time breaking bank was popular, so you see where the name came from.

And that’s been running for eight years. But increasingly I’ve been feeling like the scope is not big enough that I’ve had a good dialogue and discourse in the banking space. And I feel like I’ve really added value to that conversation. And I’ve certainly made some big bets in terms of predictions that particularly since the pandemic have really been shown to be accurate. But there’s much bigger problems in fixing the banking system. And ultimately, I think the way my brain works, I’m very logic oriented, I’m very problem solving oriented in terms of the way my brain functions, and I keep seeing ways to connect the dots and fix some of these problems that are argued about incessantly in the media and so forth.

And so I’m just trying to figure out how do I help other people to see these connections and how we can come together on these issues rather than remain divided and contentious. And if I can achieve even part of that and be part of the solution, then that will be incredibly fulfilling. But I guess part of it is also wanting to leave a mark, make a dent in the universe, you don’t make a difference.

Jennifer Tescher:
Yeah. I know that you are focused on much loftier things than banking, but I do want to keep you there for just a minute.

Brett King:
Sure.

Jennifer Tescher:
So you mentioned, Moven, the company that you launched. Gosh, that’s probably when I first met you.

Brett King:
Right. So August 2010, was officially the day the domain was registered, but 2011 was when we went public with Moven. So it would’ve been about that time. Yeah.

Jennifer Tescher:
Yeah. And I think it’s fair to say that in a way Moven was ahead of its time.

Brett King:
Yes.

Jennifer Tescher:
And-

Brett King:
That was a bit of a problem as well, but we can discuss that another time.

Jennifer Tescher:
Well, right, but that in a way Moven was a neobank before neobanks existed.

Brett King:
Correct.

Jennifer Tescher:
But it really was, I think, an approach to how to engage people about their money and creating an experience that went beyond the standard products and services that we think about in banking. And so much has happened right since 2011, when you launched that company. And in particular, the pandemic, as everyone says, has sped up digital adoption. Some people say, “Oh, in six months we got where we would’ve been in six years.” And in fact, today Moven is a SaaS business essentially helping banks improve their digital experience for their customers. And so I wonder what you think about this historic, and for some people still a very much tangible divide between incumbents and fintechs at a time when the distinction increasingly means nothing, because-

Brett King:
It’s almost meaningless. Yeah.

Jennifer Tescher:
…everyone is going to be a digital company. I wonder if you could reflect on that a little bit.

Brett King:
Yeah. We did a lot of firsts for Moven. We were the first people to talk about financial wellness as a core element of a bank account, as an example, way beyond, years before anyone else. We were the first mobile banking app that allowed you to sign up for a bank account or a debit card in the app. We were the first to do contactless payments. We had a sticker you could stick on the back of your phone before Apple even had NFC technology in their phone as an example. The real time receiving experience.

All of that was paving the way for the experiences we have today. But the concept really was about having a smart bank account helped you save money. Now, systemically the other issue here is that we were abstracting the product sets of banking and moving towards more a utilitarian view of banking, banking embedded in your world that solved your problems when and where you need it. So it’s only just now we’re really start to see that happen. We see buy now pay later built into purchase experiences and things like that, savings behavior being emphasized by various tools. You’ve got Digit, Acorns, Yu’e Bao in China and the Alipay wallet, etc, more behaviorally based savings than it is account based savings. And so it’s been really incredible to see that growth.

For us, we were just too early in the process. If you think about it in 2014, we had a quarter of a million customers on the app. We were clearly on trajectory to become a really interesting challenger bank and we just couldn’t raise money. We couldn’t raise financing, because we just don’t know if challenger banks are going to work. Now that seems a ridiculous conversation to have. But I remember going in and pitching to Andreessen Horowitz back in 2012 with Alex Siam, and we were calling ourselves the Facebook of banking. And it was a really interesting conversation that showed how much the venture capital world had to understand, because they were really interested in the concept, but they said, “We want a business like this that can scale up like the social media businesses. We want a digital bank that can have a billion customers.”

Jennifer Tescher:
Well, who doesn’t? Right?

Brett King:
Right. And I’m like, “Yeah, that’s what we want to do, but we have to solve the problem of capital adequacy,” I said. And the answer from the venture capitalist, Andreessen Horowitz, was, “What’s capital adequacy? Can you explain that?” And so no concept of how banking is regulated and so forth. So we’ve obviously come a long way. Second quarter of this year is the largest ever FinTech funding quarter we’ve seen in history. We are seeing, in 26, is now the second by market value, second largest bank in the German market. Their growth has had to be capped, because they’re growing too quickly. So they can only acquire 70,000 new customers a month right now. All of the fastest growing financial institutions in the world are growing at digital scale. And that is changing market share, it’s going to materially change the financial services system in terms of its makeup, the mix of tech giants, fintechs, tech fins and obviously incumbents.

And so if you are not technology technologically enabled as a bank to work in that ecosystem, you’re just going to be squeezed out as a matter of market share changes, but it’s more than that. It’s the fact that technology is embedding banking in our world and it’s changing banking to being experiential. Rather than being a business with products, you get through a bank. And so there’s no place for a credit card in this future world, but there is place for credit contextually. For example, the reason credit cards are going to disappear are multifold. One, plastic’s going to disappear. Secondly, the whole airline miles and reward programs and cashback, that’s not as important as just helping people save money, especially after the pandemic. So thirdly, you’re not going to have to pre-apply for these things. It’s going to be instantaneous. So for all of those reasons as reshaping the way banking sits in society.

And sometimes I’m amazed, I’ve had so many arguments and debates and challenges to this over the years, but my biggest problem often is I can’t understand why other people can’t see it the same way. And I guess, again, it’s the way my brain works potentially. But when you’re a futurist, one of the things that happens at some point is because you’re always thinking about the future and what technologies can get us to the future, because the one thing futurists will want is to get future as fast as possible. So you start thinking of the world in that way. And you forget sometimes about the problems of actually transitioning through that phase of implementing those technologies and all the seismic implications that occur.

For example, the fact that in the United States, by 2025, we will probably be at half the level of branches we had pre the global financial crisis. We’ll probably be half the banks that we had prior to 2000. And so those are massive changes in the way we think about employment and the way economies function and things like that. And that’s happening in every single industry at the moment as a result of injection of technology, the internet, AI and etc. So it is a very disruptive, challenging time. And it’s happening in a compressed timeframe. Yes, we’ve had major crises or issues like this before, the industrial revolution, but the industrial revolution really took like 100, 150 years to make those changes to society. We’re having this happen in the space of 20 or 30 years in many cases. And so it’s a very different proposition.

Jennifer Tescher:
Yeah. So I want to pick up on something you said just a minute or two ago, when you were talking about credit cards and the demise of the actual card itself, you talked about how this whole earning credit card and ordering airline miles based on spend, that’s going to go away, because at the end of the day, that’s not really about helping people. And I want to use that and use the experience of the FinTech revolution over this last decade or so to think about the likelihood and the challenges of achieving technosocialism, because when I hear you talk about the airline miles and, oh, but that’s not really helping people, I think, well, yeah, but the way our economy and our political economy works today, frankly, is that there’s more money to be made from the people who already have it. And I don’t see any reason why. Even if the form factor of a credit card goes away, I don’t see any reason why we won’t still be leveraging those kinds of incentives and rewards to get people to spend or to do what we want them to do.

And I could reflect. I could say the same thing about much of what we’ve seen in FinTech that it’s improved moves convenience, particularly for people who already have money, but hasn’t really lived up to the whole promise of, oh, we’re going to change the world, we’re going to solve real problems for people, especially people who are among the have nots. So how help me reflect on the experience of the last 10 years with FinTech and what that tells us about what needs to be different if we’re going to get to technosocialism.

Brett King:
So, obviously prior to the financial crisis, we had about half of the planet who were financially excluded. We’ve made enormous progress on that. About 1.7 billion people have been financially included since then. So we’ve made progress, but getting the last mile, the last billion and a half people on board is a challenge clearly. But that’s where we are starting to see significant progress. We’ve often talked about M-Pesa as an example enabling people in Kenya to get access to financial services. But probably a couple of more recent better examples are the two largest challenger banks in the world, WeBank out of Shenzhen in China and Nubank out of LATAM (Latin America), both of which have about two thirds of their customers are customers that have banked for the first time.

And they’re able to do that because of the economies of scale of technology and the lower operational costs and the lower acquisition costs of those customers. But they’re also able to do that because digital inclusion is working. People are getting access to the internet finally, and smartphones or rich feature phones that they can afford to use these systems on. We have new smartphones, basic smartphones being sold in India today for about $10 a piece. So if we can work out the internet problem using technologies like the internet constellation Starlink and, I forgot Amazon’s name right now for their constellation, and things like mesh networking technology and improving access to cellular data, in theory, we think we can get to about 98% of people included digitally by the end of this decade. And then the only restriction that remains is no longer accessibility, but really KYC and identity issues.

And so when you see the reason India has been able to dramatically improve financial inclusion, it comes to the national identity scheme and the Aadhaar card. And we are going to need digital identity infrastructure anyway, for all of these digital services, healthcare education, transportation, banking that we’re going to need in the 21st century. And the current identity infrastructure is exclusionary. We see it for voting rights in the United States, but we see it for banking as well. If you look at the households that are excluded in the United States, a large percentage of them don’t have driver’s license or passports as an example. And so creating a national digital identity schema is really critical for that moving forward.

Jennifer Tescher:
What strikes me though as the biggest difference in the examples that you gave, China, India, Latin America, etc, is that those are mostly still developing countries that are still growing their middle class. When you think about United States, parts of Europe, etc, we largely don’t have of those problems and yet walk down the street in San Francisco or in my own neighborhood in Chicago, people sleeping on the streets and on and on and on. And therein lies the biggest challenge, I think, is once you’ve gotten past the biggest opportunities for growth, newly included people, then what? What drives the change?

Brett King:
Well, I do think economics here can be a strong argument. So we take the homelessness situation. The data we put in the book around this is quite shocking really. The average policing and social cost to a homeless person on the streets of San Francisco is about $35,000 a year. It is demonstrably much cheaper to put people in the government subsidized housing than it is. We can 3D print a new home today for three or $4,000. Now, the administrative costs around that are probably going to result in obviously much greater cost, but there’s very strong economic incentive not to have people homeless, not to have people sick and so forth.

And that’s where the automation comes in is that if we can improve the application of technology, then those decisions become very simple. But it comes back to philosophy. What’s the economy for? If the economy isn’t there to look after the citizens, what is it for? And that’s ultimately what we have to ask. But technology can bring us this sustainable prosperity, can bring incredible wealth for economies, then the only problem becomes wealth distribution. So when we talk about universal basic income as a mechanism, for example, and everyone says who’s going to pay for that, we show various ways that, that could be paid for. And one of the key areas is incredible wealth that these corporations will grow, because of the use of artificial intelligence. And then it comes back to smart resource allocation.

If we look at Apple as a company today, they’re an incredible company producing incredible products, but could you say they’re making the world a better place? Well, they’re going to be carbon neutral by 2030 and sustainable products and all of that, but they have 300 billion of cash reserves. That’s more than the foreign reserves of Australia reservation. And you could argue that, that wealth is really working for the economy. It works for Apple. They may invest in some startups and acquire some startups and so forth, but that wealth is not being deployed to generate more opportunities or improve the quality of life of the average American as an example or global citizens. And the same works for the incredible wealth that’s captured by billionaires today.

Now, one of the things we toyed within the book is should there be a natural cap on the amount of wealth that an individual should have in the system? We decided not to put that in the book, even though we predict in chapter three of the book that Elon Musk will be the world’s first trillionaire and potentially Jack Ma and Bezos obviously up there as well. But when we look at that, you say, well, is that an efficient way to use that capital? And billionaires might argue it is, but at the end of the day, when you have these basic needs for citizens, healthcare, access to education, access to housing, not being met, then it is a resource allocation issue where we need to refine the system.

Jennifer Tescher:
Brett, building the future is going to be hard, messy, scary-

Brett King:
Contentious.

Jennifer Tescher:
…and I am really glad to know that we’re going to have someone with your heart and your sensibilities helping build it. So, Brett, thank you for joining me on EMERGE Everywhere.

Brett King:
Thank you very much, Jenn, and join me. It’s a mission for all of us.

Jennifer Tescher:
This has been EMERGE Everywhere, a financial health network production. If you like the show, please help spread the financial health message by leaving a review. And if you have ideas for future guests or thoughts on the show, please click on the link in the show notes to connect with us. See you next time