Money20/20 Europe 2016 - Kristo Kaarmann, TransferWise & Jan Hammer, Index Ventures

A lot of that is actually faster cheaper, take it or leave it. But as you said, people in the audience trying to compete with banks have noticed that the way the world works is your paycheck arrives at a bank account, and then for the rest of your life you buy services from that bank. Only now are we starting to see change. We wondered if we're in a bubble, so we asked 10,000 people. Surprisingly, about 80% said that in 10 years' time a tech company will do a lot of their money affairs. So yes, we are in a bubble, but people outside also see that tech companies can do things banks do, just better – faster, cheaper, more conveniently, more transparently. Everyone smells a change; it's just a few more years away.

I remember pitching to you in 2011. You and your friends were the only ones who invested in TransferWise early 2012. The thing that excited you wasn't just the concept but that you saw people actually used it and enjoyed it. When we look at why TransferWise has worked, it's not just that we built a better product, but 60% of our user base joined because their friend told them. That is the power of masses that will make change work. Innovation will take hold, but until you have that power of masses or build a product that engages them, it's just in our bubble.

That is a very good question. Honestly, the day before we launched in 2011, I didn't believe people would trust it. I thought it was worth a try but really didn't believe. It was only by putting it out there and seeing that 15 minutes later someone puts £2,000 in our account to send to France, then euro arrives – you suddenly realize that if it's well-executed, licensed and regulated, it looks real. People are now incredibly more trusting with tech companies because they see that Google hasn't massively cooked up anything; more often we hear banks cooking up. Tech companies take the side of the consumer. That initial sign showed me trust is possible. Since then, those early users built up trust by telling their friends, and five years later, when we haven't cooked up once and the thing works, it becomes a meme that TransferWise works. We are proud that we have proven to the wider industry that generating trust is possible. We feel double responsibility: if we mess up, we lose trust in TransferWise and in the whole movement.

When we say early adopters, we mean people who are more willing to switch but they actually get benefit and see that it solves their problem. Sometimes we talk about early adopters as just curious people trying out an app, and that's not necessarily sustainable.

It was always... I was listening to Yan speak about whether you should go deep on infrastructure or reuse as much and package it better. I relate to our experience: it was almost impossible to do them separately. We had to do great front-end and customer service to get consumers, while also going deep because you can't build a good product without going deep. Speed, convenience, trust mean you need to replace quite a lot of what banks are built on. We took the hard way, trying to do both at once. Now with new-and-new partnerships, you can focus on deep infrastructure and sell to other startups, which speeds up innovation. Unfortunately, we had a different story: we became independent first, built a parallel infrastructure to correspondent banking. We can deliver money to 98% of the world's bank accounts without a SWIFT message. Fascinating: banks work the old way, TransferWise has a parallel reality. Now it's starting to converge. Two banks decided to let customers link their banking app with TransferWise. You link the apps, you're still in your internet bank, but the international payment goes through TransferWise. Not white label, but a different service within the bank's skin. To avoid a master-servant relationship, startups need to become independent first. We spoke with those banks for years, but only now it was the right moment – we have a big following and good product, so we can build a side-by-side product.

Yeah, so looking at the interest, definitely there will be more. It's not part of our strategy – we can succeed without it – but it's very natural and helps our customers and their customers. It's more convenient. We would love it a lot.

That's a very good question. There's a theme: messaging is the new ecosystem, the new operating system. If you can do everything in messaging, then absolutely yes, you should be able to do banking and TransferWise from messaging. We're looking at it. The difficulty is that financial infrastructure is far from messaging, so you can't access your money from a messaging app yet. But it's an interesting thought. I often think about the future: everyone in this room is looking at the most profitable parts of universal banking to disrupt. Banks cross-subsidize, so profitable products subsidize less profitable ones. What happens when those crumble? Once we take the profitable ones, banks will need to change their pricing and business model quickly. Sometimes I'm scared about what the world would look like and what governments might do.

I would very much welcome people who want to get in. TransferWise is hiring all the time.