Citi’s Fintech Chief: Why ‘Self-Driving Money’ Is the Next Revolution
By Justin Estes, Contributor at The Financial Brand
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Executive Summary
- On a recent episode of the Banking Transformed podcast recorded at Money20/20 in Riyadh, Saudi Arabia, Citi’s Ronit Ghose and host Jim Marius discuss a coming era of “self-driving money” where AI manages finances automatically as institutions embrace stablecoins and on-chain transactions.
- Artificial intelligence, blockchain and shifting global power centers are converging to redefine how money moves and how banks operate worldwide.
- The economic center of gravity is moving east toward Asia and the Gulf, signaling a new phase in the evolution of global finance and financial technology.
The Shifting Economic Center of Gravity
Q: You’ve spent 28 years at Citi — what drew you to relocate from London to Dubai nine years ago?
Ronit Ghose: Part of the reason for relocating was I wanted to be closer to the economic center of gravity, which has been somewhere around New York, London for much of the 20th century, is shifting back east to where it used to be in the 18th century and the 17th century. Somewhere between China and India, or probably in the stands if you did the geolocation of the economic center of gravity and so I wanted to be back near where the future was being built.
About 10 years ago, I became fascinated by the developments in China, and we wrote one of the first in-depth reports about Chinese fintech in English, which went viral. And I was like: “okay, there’s a lot of people interested in this, there are a lot of things happening on my doorstep in London.”
Q: How did you transition from traditional banking research to running a “Future of Finance” think tank?
Ghose: Previously, I was the global head of financial research, focusing on stock market research. I was a stock market analyst. I started my career writing notes about banks like Northern Rock and for running SPA Bank and Julius Baer, European and UK banks. About 15 years into that career, or 18 years into that career, we began to realize this thing called fintech in the early 2010s was really taking over London, where I was based and Asia.
So, 2014, ’15, so I went down the fintech and the crypto rabbit hole, and my bosses have now retired but all credit to them, they let me get a little bit off the beaten path because it wasn’t obvious in the mid-2010s to be writing about and spending a lot of time hanging out with fintech founders and crypto entrepreneurs. They gave me that rope to do something different, and then what was my evening job or my weekend job became my day job. We set this unit up about five years ago.
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The ‘Self-Driving Money’ Revolution
Q: Can you explain the concept of “self-driving money” and how AI will change how consumers manage finances?
Ghose: I’ve heard this … this is not my term, I don’t know who came up with this, but the concept of self-driving money. I don’t know who came up with that but it’s a great, great term (self-driving money) because it just makes it so vivid and easy to understand self-driving cars. We’ve spent 10 years also in the valley, in the Bay Area trying to get self-driving cars, and now there are self-driving cars. So, Waymo is responsible for approximately 20% of all rides in San Francisco, or something like that. So, we have self-driving cars.
Most of us, so me in Dubai or back in London, we jump in an Uber or a black cab, no one drives in the city. You drive in the suburbs or if you’re doing road trips. In the city, someone else takes care of it and the car is driven by … But in many parts of the world, well, San Francisco today, a machine can do that. And just like people don’t like driving in cities, most people dislike managing their finances.
Q: How does this compare to the self-driving car revolution we’ve witnessed?
Ghose: We use money to do something else. Like we don’t wake up in the morning and go, “oh, this credit card’s so cool or this mortgage is just so exciting.” You get a mortgage to get a house because you have a family. It’s the classic marketing cliche, but that’s why mortgage products are sold normally with a mom and a dad and kids or whatever the modern blended variety of that is. That’s how you sell it.
You don’t sell it by saying: “hey, we’ve got this really cool financial technique or logic built into the product.” You sell it by saying you want to live in this house. So, most of us don’t want to think about money; we just want to use money to do something else, which ties back to AI, as AI becomes your self-driving car and your self-driving finance.
And so, AI can take care of things like “oh, you’ve got a mortgage payment due. Is your checking account up to date? Do you need to move money from your savings account into your checking account, if it doesn’t auto-balance?”
Stablecoins’ Institutional ‘ChatGPT Moment’
Q: You’ve called this year the “ChatGPT moment” for institutional adoption of stablecoins -— what does that mean?
Ghose: What’s really exciting, and I’m sure we’ll be talking about it during this conference, we talk a lot about it in Dubai and Abu Dhabi where I’m based, is digital assets, for wonder of a better word. So, it’s not just about crypto, but the whole on chain money revolution, so crypto, stablecoins.
And what’s really a big, big thing this year — and we wrote a report about this in April, and we called it this year … is like for institutional adoption of stablecoins or blockchain, specifically the ChatGPT moment. Now, I don’t mean that everyone and their granddad is going to start using stablecoins on the streets, but institutions have been doing innovation theater with blockchain for a decade, and then the switch got flipped. It’s suddenly become a real thing. It’s not just about innovation being done by startups.
The biggest banks in America, my own company, others, we all know the names. But the biggest banks in America, in Europe, in Asia are now putting into production, already put into production on chain money.
Q: How will stablecoins, bank tokens, and CBDCs coexist in the future payments landscape?
Ghose: Sometimes I see my friends who … we are all selling something, so I don’t disrespect that. I see posts on social media claiming that stablecoins are going to take over the world, and sometimes our research also contributes to this hype. But actually no, stablecoins will be very useful in some areas of finance, and in some areas of finance, you’ll get bank tokens.
Banks will have their own coins. Banks are already experimenting — us, Citi, JPMorgan, others, are experimenting and put into production for our wholesale clients, for our institutional clients who want to move money. Even today, billions of transactions occur daily on these private blockchain networks.
One of the points we’re making in a report that’s about to be released is that our GPS report focuses on bank tokens. Therefore, deposit tokens or tokenized deposits are likely a significant development. And then, in some countries, CBDCs (central bank digital currencies) will become a reality. So, it’ll be, as you say in English — I’m sure you have this in American as well— it’ll be horses for courses. For a specific product or activity, you will have a certain amount of money.
Open Banking’s Promise vs. Reality
Q: How has open banking evolved since the UK led the regulatory charge?
Ghose: Open banking has obviously, from a legislative and regulatory angle, been led by the UK. But in production or in use in a slightly unregulated, anarchic way, the U.S. has probably been ahead of the UK or the rule books that the UK had then got copied around the world, including in this region and the GCC and the Gulf.
However, what open banking enabled was part of the same pro-competition agenda that UK policymakers had. So, their agenda was (and this is where fintech came from) the UK ended up having two or three of the biggest banks in the world by balance sheet in 2008, and that meant that the taxpayer, the government had to go and put a lot of money into bailing out these banks.
Q: Why hasn’t open banking been the game-changer many expected?
Ghose: And so, open banking is a response to that, a policy agenda saying we need more competition and the delivery mechanism or the tool that is APIs is to say, “OK, I can, in very simple terms, if my bank accounts …” So, open banking allows new players to come into the market, but in the UK experience, it’s not really been that much of a big game changer as we thought it would be.
Vision and the Future
Q: Is AI overhyped right now, and if so, why is that actually necessary?
Ghose: Over hyped, oh gosh — you and I both know of this concept is most of the audience will; the hype cycles. So, Gartner and others have introduced the concept of the hype cycle, and I understand why you need one. People go, “oh, it’s overhyped.” So, right now, it’d be AI, “oh, it’s overhyped.” I’m like, yes.
But every big transformative project gets overhyped, it has to be for two reasons. One is that it’s a bit like when the railways were being built in England in the 1830s and the rest of the world in the 1840s and 1850s. If you don’t have a hype cycle, you don’t bring in capital.
You need a hype cycle to attract capital, to motivate people to build the future, and also to convince users. What’ll happen next year is that people will go, or I see it happening even this year; yeah, it’s not really changing how we do some of our day-to-day activities that fast. But then you’ll probably find in three or four years ago, wow, I think it’s a Bill Gates quote: “We underestimate change in the long term and overestimate in the short term.”
