Agency and Apathy | TWIF UK & Europe

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Hello fintech friends,

Last week, I had my first-ever mildly viral post on LinkedIn. It wasn’t a “banger”, and I didn’t really understand why it was doing well. Four ill-thought-through lines resembling a lukewarm take. Maybe I got lucky on LinkedIn or whatever.

Later on that same day, in the family WhatsApp, my brother posted, “25,000 and counting.” I assumed he was talking about my post. (I didn’t realise he was that much of an LI stalker too!)

The next day, I realised he wasn’t talking about my post. He was talking about his own. Both of us, on the same day, for the first time ever, had posts that reached tens of thousands of people. Curious… were we mercurial social media bros? Judging by our subsequent posts, it appears not.

At the same time, I downloaded a chatbot called Instinct. This is the one everybody on TwitterX is going crazy over. It has something like a billion in payments flow per month. (Not in the EU cos of regs…obviously.)

Anyway, I wanted to see what all the fuss was about. My co-editor Matt recommended it and sent me the invite link, so I downloaded it, and it’s pretty handy.

Among many things, one thing I’ve tried to use it for is to find (and pay for) cheap flights. So I gave it the instruction, and every day it sends me a message to say, “Hey, I didn’t find you any cheap flights, but I’ll continue looking.”

My assumption is that I’m not the only genius attempting this. I imagine there are pools of cheap-asses all over the world trying to get discounts on their travel and God knows what else.

Side note: It then occurred to me that if you are a pricing aggregator like Skyscanner or some such, presumably you’re seeing a surge of inquiries for flights in general. And if you’re seeing a surge in demand, wouldn’t the only rational thing be to increase the prices?

Another thing I’ve been noticing is the shift in my buying habits: let’s say I go to Amazon and try and find something. Before I buy, I’ll usually go to ChatGPT and say, “Is this cheaper somewhere? Or find a discount code, a coupon. Steal it somehow. I don’t mind. Just make it cheaper.” Actually, while writing this, Elon Musk tweeted to this effect. So that means I’m basically Elon.

This actually works reasonably well; previously finding me some pots and pans 25% discounted vs Amazon.

Bringing me back to my point about my LinkedIn post. I started to wonder: was it really humans looking at people’s posts? It seemed just too big a coincidence that two people who are social media losers, with little track record, had a semi-viral post on the same day.

Are the LinkedIn algorithm gods favouring us, or is it that every user is now using agents? And they’re kind of just pouring through and flowing over the digital realm with a rapacious appetite that humans simply can’t match. What happens when there aren’t humans in the loop?

The point I’m trying to make is that human interaction and behaviour, from the perspective of commerce, is dead. Commerce as we know it today depends on the limits of individual agency. It depends on apathy. In a sea of agents – all with infinite patience and willpower… doesn’t this become the default buying habit? And if it becomes the default, what happens? When all commerce has been built around the buyer’s journey, what happens? And for fintech, what happens to the artefacts built for that journey?

Take a look at the physical realm as an analogue. The supermarket charges brands more to be at the end of the aisle rather than the middle. It has the highest margins at the impulse buy section next to the till. But if humans had infinite agency and willpower, and none of that pesky apathy, these things would cease to exist.

It seems to me agents mark the end of the convenience epoch and are ushering, nay heralding in the quality epoch. Humans are being taken out of the procurement journey, leaving only procurement need.

And if you take humans out of the equation, what does that mean for us here in payments?

Amazon’s 1-click buy out. 3DS? Card on file? Hell, even Direct Debits? Do you even need a solution to recurring billing when an agent would be happy to pay one-offs in perpetuity? It also leaves other huge unasked questions. Who’s authorising? Who’s liable? but these things are better left to my colleague running This Week in Fraud.

And what about that age-old cross-industry problem of conversion? It’s not unique to fintech, but fintech is uniquely sensitive to it. Signing up for a regulated service is a brutal slog for most people. And the majority of fintechs in existence today will have a conversion/activation rate that would make an incel blush. People just don’t like filling in forms. And in banking, you’ve got a lot of forms to get filled in.

Paradoxically, I think this could actually harm growth for the hyper-scalers and help the start-ups. You see, it’s an ugly truth of fintech that rapidly growing regulated entities are only too happy to pay the “growth tax.” What’s that, you say? It’s the valuation of future cash flows against future fines. Imagine your onboarding and risk team diligently pore over every customer going through the registration journey. It’s simple maths that they are going to find a huge amount of customers that they really shouldn’t onboard. But the revenue they will bring (and subsequent capital raises they enable) often dwarfs the fine that comes later because of it.

Conversely, more diligent start-ups often can’t onboard legitimate customers because they simply don’t have the automations bigger fintechs do. And the apathy of their customers results in an uncompleted registration. Lowering conversion rates and revenue. AI will allow the small fry to deliver smoother onboarding experiences. But more importantly, AI will mean a user never has to deal with the frustration of form filling. They will just have their agent do it. This will represent a levelling of the playing field for new fintech entrants.

What’s more, it will shine a very bright light on the amount of AML and fraud going on in these businesses. And while AI will enhance every part of a fintech’s operations, I’m not sure they will really want the spotlight on that part of the machine.

In the end, commerce is designed around human apathy. Given a human’s finite patience, discipline and willpower, if your product isn’t easy to access, it won’t be accessed.

An often-used phrase is that first-time founders solve for product. Second-time founders solve for distribution. I think the age of AI will just mean all founders solve for product. And distribution will become a consideration of yesteryear. “Remember when we had to Facebook so people would see our product!”

“Remember the Apple Tax?! Gosh, isn’t it crazy that we had to pay a ransom just for people to use our product!”

I’m being hyperbolic, of course. But so is AI.

- Daniel

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Due to the flood of submissions over the past few days (and more than a few requests for extra time), we’re keeping the nomination window open for one final week.

You now have until Friday, October 16 to put forward the builders, platforms, and investors who drove lasting, positive change in fintech this year..

We’re recognizing honorees across five distinct categories: Big Companies, Startups, Founders, VCs & Investors, and Social Good / Nonprofits.

Winners will be announced live at our year-end Fintech Formal on Dec. 11 in New York.

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Word of the week: Vetocracy - a dysfunctional system of governance where too many checks and balances allow multiple individuals, groups, or branches to exercise a veto, preventing any single entity from making decisions or taking decisive action

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