Mark Warrick – full transcript of the podcast

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Marcel Klimo [00:05]

Hello there. Welcome to another episode of Banking on Air. My name is Marcel Klimo and I’m the host. At Vacuumlabs, a solution-based tech powerhouse, we believe that the future is in communities when it comes to digital transformation and financial services.  So if you’re interested in hearing more about FinTech, digital banking or payments, please don’t hesitate to subscribe.

My today’s guest is Mark Warrick from Cauldron, which is part of the Thought Machine. Together, we recently implemented Thought Machine’s core banking service Vault in Hong Kong. And we also wrote the report together on how to move into the cloud to make your bank future-proof. Definitely check it out. We also became official partners, so lots of fun going on. And previously I also recorded a podcast with the Thought Machine CEO, Paul Taylor. So, if you’re interested, definitely check that out as well. But right now, as we’re talking to Mark from Cauldron, it’s a division of Thought Machine. It’s a creative lab, it’s a place where new things are created and it will spun off just to create those really cool, interesting ideas. And to start that off, Mark, when I was browsing through your LinkedIn, I noticed that you have very rich professional history and it all starts off in the Royal Navy. Can you describe how that happened and how that led you all the way to Cauldron?

Mark Warrick [01:15]

Yeah. So I joined the Royal Navy as a weapons engineer officer for my first five years. Very scary being posted at the age of 23, helicoptered onto a war ship in the Northern Arabian Gulf to help protect our platforms.

Marcel Klimo [01:29]

So what happened after that?

Mark Warrick [01:30]

At that age of 16, it was sealed in me to invent. And it was because it was like a, almost a silly idea that I just worked so hard on and then it became a popular idea. In the Navy when I wasn’t on operations, doing training or being in the Indian ocean, I would be applying for patents and inventing things. So I remember vividly in the Navy obsessing in my cabin about heartbeat music. 15 years or so ago, I applied for a patent for your earphones to detect your heartbeat and then change the music based on what you’re doing in the gym.

I remember applying for a patent for a little lamp that changed the amount of light it gave out based on the ambient light coming in the window. And so that was me. I had to leave the Navy. I found my way into two different threads really joined the city, but quite quickly set up my own business, my own creative agency called Kaboom and never looked back.

And then that ultimately that creative kind of invention hub then brought me into Thought Machine and creating Cauldron.

Marcel Klimo [02:29]

So can you tell me more about Cauldron?

Mark Warrick [02:32]

Yeah. So it’s a lab, it’s a creative team. It’s engineers and designers working in a small team, only 12 of us. And we invent on top of our mothership company Thought Machine technology called Vault. So what we do is where the creative laboratory of Thought Machine, have been ever since it started. And our job is to look at what the consumers might want out of a core banking engine in the future and make sure the core banking engine can do that. Whether it’s true personalization of loans, whether it’s game world for savings, et cetera. So that’s our job. We’re just dedicated to that singlular mission.

Marcel Klimo [03:08]

One of your big goals is to bring art into finance. Why is that?

Mark Warrick [03:12]

I think it’s a space that is totally void of arts, or it has been, you start seeing glimpses of it. And there aren’t many industries left that are vacant of art. If you look at computing, it was beige boxes and megahertz and ram, stats for a long time. And then things came along like the iMac, a beautiful product, turquoise back see-through and it was a piece of art as much as it was in the world of finance, we’re still in megahertz and ram. We talk a lot about APR, is a war of APRs and art doesn’t really exist here yet. And when it comes, you start seeing the reactions to 4 million people who wanted Monzo, not just for the movement of that community and everything, but because of that bank card was a piece of art. It was a fashion item to have a coral pink bank card like that. And so, that’s what you’re starting to see. These drops of art start coming into finance and banks can start winning consumer war of market share not through APR, but because people have a feeling or want to go that way for something they see.

Marcel Klimo [04:16]

Yeah. So it’s almost like in the world of banking or personal finance, we’re still in that beige box era where we’re seeing the sort of first examples of Monzo or we’re seeing Starling has a nice little visual. You’re starting to see some of that more optimistic, playful, happy side of life, as opposed to just, “Oh, how much money did you spend on your gas this month?”

Mark Warrick [04:38]

Yeah. And if you look at traditional banks, they have put an artistic license around one aspect – trust. They always have. They’ve always gone “it’s all about trust and heritage and things”. And so, you can see that in the way that they advertise and things, but that’s where it stops. And like you say, to some products can feel more playful, some products should be sophisticated and so they have a sophisticated art direction. But we don’t see that at all. What we see, like you say is the beach box UI and this is what you’re going to get. Here’s your account balances. Here’s your transactions. Why would you want anything different?

Marcel Klimo [05:12]

 Yeah. You usually see a lot of blue because you see like these Roman and Greek columns representing old streets, for certain people you want that trust.But at the same time, in personal relationships you don’t actually build trust purely on everything being perfect, but rather imperfect. Life isn’t perfect and there’s beauty in imperfection. So it definitely makes sense to me, but a lot of conversations that I hear is we should be moving towards this sort of Asian model of super apps. You have everything in a single app. You can live your life within Weechat technically. Not technically, literally. From the moment you wake up to the moment you go to sleep, you can do all your commerce within that single application. Do you think that is something that will happen in the West or that will just not take off at all?

Mark Warrick [06:56]

Right. It’s a really interesting topic to talk about and it’s something which we’ve been having quite detailed strategic discussions with our partner, us too, about this. What is really interesting about this is of course there is a model for superapp. We’re seeing that. But we’re seeing banks, their market share get cannibalized by great individual apps. Gohenry for parents, has got a million parents who are on there, taken away from Monzos, taken away from high street banks. We see other apps like habitat, the mortgage app, is now offering it so mortgages and that’s taking market share away. It goes on and on. And what I think is really interesting is, what are you going to do about that?

Because what they’re getting right is they’re not even well-known high street names. Habitat, gohenry, why wouldn’t you do your kids banking with a high street bank? That’s been doing banking for 150 years. And so I think, and us too think as well, when there is a big case to say, do you know what super apps – the problem is, you’re trying to get all the same art direction, all into one app. And you can’t connect with that target audience. The reason why parents love gohenry is because of it’s designed exactly for them. Kids don’t want to see a normal banking app. They need to see something a lot more fun. Some people like the art direction, the cheekiness of habitat, mortgages, not everyone likes it, but some people do, enough to.

So what we’re seeing is that maybe there’s a future of a normal banking app, a PFM, personal finance manager banking app, that you’re seeing with your accounts and your transactions and everything else in there. Of course that’s there to stay, but there’s also a future for that same bank, whether it’s Monzo, whether it’s a high street bank, whether it’s Starling, to create many apps on the side for those individual experiences, because that’s what you want to go into for those individual moments. And then that helps you keep that market share. So it’s a really interesting topic to debate, but I think as art starts coming into finance, I don’t think he’s got a choice, but to start separating out some of these experiences.

Marcel Klimo [08:00]

Yeah. We started to see this about a year or so ago when we started to realize that it’s almost a cultural thing in Europe, which is much more individualistic than a lot of the Asian markets, where we came up with this term, which we just randomly uses this tribal banking. Which is, it’s almost like you’re building these small little experiences for tribal communities, but not literally tribes, but the tribes who have a common goal to achieve or a common problem to resolve, as opposed to the super app situation, which is a much more sanitized or cleaner or simplified for streamlining your life as opposed to experiencing your life.

Mark Warrick [08:36]

Yeah. You’re going to go in there. You’re going to do a function. You’re going to get that function done. You’re going to come out. But actually, I want to enjoy how I’m saving and we’ll get onto the topic of game worlds later on but, if you want to save through play, you are not going to do it through that steral super app interface. You’re actually not even going to want to go into that because if you are for saving in a game world and you want to discover characters and do this, the last thing you want to do is open up your super app and start seeing your mortgage balance when your mindset is not in that place then.

Marcel Klimo [09:06]

The thing that I really love about how you approach in Cauldron and how this entire initiative is happening is, you’re essentially taking Thought Machine, which is a next generation core banking engine. It’s almost designed to have multiple apps surrounding, connecting into it. It’s designed to be something that is multichannel by design. So it’s almost like you’re saying we have this, but we as humans, aren’t really good at understanding what the capabilities of that are yet before giving you examples of it. You’re almost there with Cauldron to say: “Open up your imagination. These are the things that can be possible with this technology if you dream big.” Is that right?

Mark Warrick [09:43]

Yeah. It’s the hardest thing for people to do in the context of how they are using their money today, to be able to imagine what it would be like tomorrow. And ultimately, it’s for designers to design tomorrow and then to say: “Hey, what do you think?” Rather than asking the customers of today. And so exactly, Cauldron is there to say: “Look, hey, we might not have this in five years’ time, ten years’ time, this is what you might see. But to help you understand that we’re not just going to show you a vision video. We’ve built it. Here it is. Put it in your hand, play this, take it away for a month. Tell us what you think. And that’s one of my most important mantras, or for Cauldron, is we have to build. And it can sometimes take us 18 months to build what took us a week to come up with. But you have to get people to use this, put it in their hands and then they go: “Oh, I really liked that.” or: “Oh, feels a little bit off to me.” That’s how we learn about what the future it’s not cheap to do, it’s an expensive game, but innovation has always been expensive. But the rewards are great.

Marcel Klimo [10:41]

Yeah. I think this is a perfect segway to just talk about some of those things that you’ve done as Cauldron.  Because the first time I saw you was in Singapore FinTech Week and there were only two booths that I remember that were just full of people. One of them was Razor, which is the massive gaming brand which had their beautiful led green booth. And then there was part of the Thought Machine booth that had one of your demo apps.

Mark Warrick [11:03]

Yeah. It was Nestlings which is the savings app for people in the future. So you’ve got little characters. So you’ve got a game world. And how different is that? When you say this is savings. These little characters are all discovered a little bit like Pokemon Go characters are discovered. But this time through your transaction. They start off with simple characters, like very easy entry point, rounds up your transactions. But again we’ve got a character that’s rounding up your transactions, not just a function. Celebrate, you put 50 P away every Friday, just because it’s Friday. We’ve even connected to the weather API, which is a bit of fun here in the UK, but every time it rains, this character would put money away.

There’s a leaderboard. Wow. Now we’ve got a leaderboard for how, who’s saving the most, which Nestling character. And a level up at five pounds. Now, these characters, part of their story is that they’re on that world and they get their nectar, they get happy around savings. So you can put “don’t save”, but emotionally you’ll probably only ever do this once because you will see these Nestlings cry and they will get sad. You’ve got a foliage which has grown through, we’ve got Nestlings waving at us. They’re happy. And so again, you’re getting that feedback that you wouldn’t normally get back. So you discover them, like I say, in a very much inspired by the Pokemon style of discovery. You’ve done a transaction. This character has arrived, and it will happen in real time. The character is called Grim and you can adopt this character or not. So this is the lord of nocturnal spending and it happens because you’re out late, 11:00 PM, and you are spending money. So what Grim is there for? It’s more of a finding character. It’s going to find you 75 P for every transaction you do. So you can adopt that character or not. Lumin in that little peaceful purple moth, puts away money every full moon so every 28 days Lumin will put two pounds away for you. So you’re activating to say, this is how you want to save in order to level up. And then finally, it is the full moon so Lumin wants to save two pounds for you. You’re going to say “save”, the two pounds goes in and then you’re going: what’s this new little environment going to be?” And a new little environment is a beach world. And so now this is our level to up until 10 pounds but then you’ve got the volcano world to discover, the mystical stone level, and lots of things over the 10 levels of the game, lots of different things happen.

And so, there you go very different to normal savings. When you give that to someone with a Nestlings bank card and tell them: “Hey, go and experience it for a month.” It’s astounding, the reactions that you got

Marcel Klimo [13:30]

So what sort of feedback do you get? Is this mostly children or do you focus on adults as well?

Mark Warrick [13:35]

So, this, the adult market, it’s huge for it. They want to play it, it’s how they want to say. And so yeah, the feedback is it’s always: “When can I have it?” People going:  “Wow, saving with gaming, and proper gaming, and Nestlings is really interesting.” So yeah, exciting to be getting that feedback. And of course, we’re just going to keep developing the products and keep doing it. And hopefully banks will start taking on the fact that why shouldn’t they look into game world and saving in particular. Saving should be fun. It’s quite a fun product.

Marcel Klimo [14:03]

So is this meant to be as a demo or are you building this as a separate product that has a separate sort of roadmap and plan and growth plan and that sort of thing?

Mark Warrick [14:12]

We always start it off as a demo, but because we’re building them, you end up getting to the point where you go actually to build that demo out. So quite quickly as you’re building a demo, which you want to show after six to nine months, you realize that you’re not far off getting it into a production state. And so regularly with things like Nestlings, we’ve already got a UK bank reserving it. And that happens to us frequently. Our products, we’re making them, and then to upgrade them into production, isn’t a crazy expense given that it’s had 18 months worth of work on it already. So Nestlings, yes, is now being built up ready for banks to license in different regions.

Marcel Klimo [15:49]

So it began as an experiment that was really just the idea that this is something that we would like to see in the world. This is something that we’re seeing progress bars and badges everywhere, but that’s not really games, that’s just gamifying something. That’s not fun. It’s just, you’re trying to make it fun. At this point, you put so much time into it that it’s ready for other banks to try it out within their either their applications or a separate app.

Mark Warrick [15:12]

Yeah. Yeah, exactly that several of our products, they end up in the same place. Some of them stay as demos and we’re like, great that’s a demo. But in some cases like Money Monsters, we’ll talk about later, Santander bought it. They just went: “Right, we want that”. And so we’re frozen, locked out from using it now. And that happens. We’re delighted that happens because that’s what we want to do, is to say to the industry: ‘This is where it can go.”

I mentioned Nestlums quickly cause it’s one that actually we wanted to launch ourselves. Just because we wanted that experience of putting a product into market and practice what we preach. And the simplest thing that we could launch ourselves was the baby sister of Nestlings, which is Nestlums. This is for a kid, right? They’ve got their own little Nestlum character, for them to interact with, a little bit like a virtual pet. The pocket money, there is 18 pounds 50 and actually what we were trying to teach them about virtual currencies as well, and the pitfalls of it. And so we’re introducing gems to them right now. So they understand the difference between gems in apps and real money. But it’s actually a pocket money training app for young kids.

So GoHenry is good for older children, but this is for four, five, six, seven year old children. They can add a task in and if they do that task, we put lots of interactions in: “Hey, the four years old, use your finger. This is on a parent’s phone, drag it tick off. Now tap the egg.” They break open the egg, and now they can collect their coins and their gems. And now. see the Nestlums happy. But then do things like some educational games in here, but they can go into a shop and start spending their gems that they may have been awarded and start feeling like that transaction even without spending real money. But then the parents going: “Hey, It’s actually virtual money. That’s not real money. If you want to buy an icecream, let’s go and spend the coins.” And so this is a big differentiation that we wanted to teach children. It’s way more exciting to go into these little worlds and to do these little things.

Marcel Klimo [17:00]

Is this connected in any way to an actual banking app or is this just purely for the educational purpose and the parent tracks the money?

Mark Warrick [17:06]

Yeah, so purely at the moment that one for educational purposes, parent tracks the money. Now this is on the app store, we’ve got it on the UK app store. It was chosen by Apple as an app of the day, just been recently top four apps they love. And so because of that, of course, banks are now wanting to sponsor it and maybe upgrade it to be real money. But that’s our job. We did it for ourselves to have all of that practice, what we preach, get a product in the market. And also we deliberately wanted to see what we could make a product that would attract Apple’s attention. Because banking apps don’t often become an app of the day. And they don’t often get four new apps we love. And that is us talking about the super app side again, because we’re saying: if you just keep ramming everything into your superapp, Apple, one of the world’s biggest markets, is not going to pick that up and start promoting it for you.” And so there’s another part of that jigsaw of it’s the future, right? An individual app may just for that audience. And now we’re on Apple’s promotional trail. It keeps coming up on the app store and that’s just free marketing to half of the mobile phones here.

Marcel Klimo [18:08]

So, this isn’t  connected, but Nestling I’m guessing is connected into Vault?

Mark Warrick [18:12]

Yeah. So Nestlings is the heavier one. That’s connected to a current account and savings account in Vault. And so it looks at your current account, looks your spendings, and then moves money into a savings account. So a much heavier app in that sense.

Marcel Klimo [18:24]

Yeah. For Nestlums, it’s not really needed because you’re really, even you’re getting into issues like small kids can actually have cards, you can wiggle around, but you shouldn’t really be giving out cards to small children. So it makes sense within that small, a younger demographic, as opposed to like the GoHenry audience that you were speaking about earlier.

Mark Warrick [18:42]

Yeah, exactly.

Marcel Klimo [18:43]

So you mentioned Money Monsters a moment ago. Can you talk a bit about that?

Mark Warrick [18:47]

Yeah. So Money Monsters and ,absolute projects of passion of mine. And again, around pocket money where I was desperately worried that children can’t actually see the number  without going to their parents and say: “How much pocket money I’ve got?” Like when you and I were growing up, we used to have coins and we count them. And in a cashless world, that it is gone for a lot of children. They can’t physically see their money. And I worry about what that means in the future. Especially during curiosity moments, I would have been in my bedroom and I just empty my piggy bank and play with the money. I could physically see it. A child who’s curious about their pocket money now, they have to get to their parent and ask. And so they probably just don’t.

And so this, the Money Monster, you shake it, it had a tilt switch in it. When that tilt switch got a signal from your shaking, it would then go to Vault, find out the balance and it will put it on the screen. Way ahead of its time. We’re just not seeing these really out there much in the world. And like I said, this one Santander bought the rights to it, and I think you’ll see this come out one day once the market’s right for it.

Marcel Klimo [19:45]

Yeah. And this is beautiful because this is extremely simple example of something, if you just think back a couple of years back – if you wanted to know your balance and your bank, you actually had to physically walk to a place, speak to a person and say: “How much is on my account right now?” And this isn’t that long ago. What is it? 15 years, 20 years that this was still considered very normal? So within one generation, we now have the capability to not only say how much is on my account or how much have I saved up, but it’s a kid can shake a monster and the monster it tells them. It reminds me of a Furby from like late nineties. If you remember, if you integrate this into a Furby, it would just tell you.

Mark Warrick [20:23]

Yeah, this is… When we talk about art and we talk about the creative process. Look, you can have an app on your phone that is about kids, pocket money. Kids, they want a monster, right? You can’t get away from it. They want a character, they love this money monster, all of the little accessories come off and they can make new money monsters out of it. It’s ready for licensing. And you can quite easily turn that into a million of course. And it is ready to go. And that’s the important step. But like you were saying earlier as well, if you say to someone: “Oh, we’re thinking about doing this and it’s going to be something like it’s a toy.” Until you’ve made that toy, until you’ve got that magic moment of you’re shaking it and then you see the balance come up, you really can’t gauge, whether that is a successful product or not. And so you just got to make it. And I’ll talk later about the focus group side of things and in this world of experimentation focus groups just don’t work. You’ve got to give it to, the real product to the parent at the end and the child and see what happens.

Marcel Klimo [21:20]

I have a fairly controversial question: have focused groups ever worked other than giving to people who will actually be the end users?

Mark Warrick [21:28]

I think there’s a good place for them for iterative and involved design. So at this stage, once the Money Monsters’re done, they work. Because now I can get focus groups sitting around and talking: “I think you’re right. No.” But giving 10 of these out and focused customer testing over a month: “How was it? Where did you put it in the house? Did it stay in the bedroom?” Did they ever take it downstairs? Did they ever want to take it to school? That is like gold, but you can’t get to that until you’ve got the product. And yeah, I think you’re right actually that whole sitting around ,10 people and doing a face group like that, I don’t think so. Not for this type of product. Probably for some sort of other type of research in different industries.

Marcel Klimo [22:08]

New drugs for something, maybe. A lot of this has been focused on things that people would traditionally consider focused. Although, this might not be the case. Like for myself, I’m a bit of an outlier because, I game daily to this day into my thirties and I’m weird for ,many, but not for others.  But you we’re seeing people like you’re going on the underground, you’re going in a bus, people playing games on their phone all the time. Have you done a things that are less immediately game-like or less immediately kid like?

Mark Warrick [22:38]

Yeah. definitely. So it’s another key area. And again, we spent a couple of years now live in the market. Cool silo or our team’s design, wonderful company called Killik & Co, a wealth manager wanted to bring their wealth expertise to the masses.

Killik & Co, it is for a high net worth, but bringing in all of that experience to the masses. Around 30, 35% of that whole UI is art. The more you save, the more resplendent and beautiful that piece of art becomes and the less you save, the more it dies away. Little bit like a virtual pet in a sense.

So this is a product of sophistication, right? It’s a product that is designed to be very different in that sense and all those little orbs move slowly. And the design of that is you don’t want them moving too fast. This is your saving and investing. So it’s got a lot of consideration around momentum control, but this product people use, it’s live now on the app stores. They love it. It’s got a sense to it that is a different art direction. It’s also clever. That’s connecting to my bank account and working out how much I can save on that day. So he’s got a clever algorithm in there that works out recurring spending, works out how much I might be able to afford to save, being quite aggressive on mine there at the moment, but I’ve deliberately doubled up what it was going to do.

So there you go. There’s that side, but then also Vault Rare, which is very different than. Vault Rare is a totally different product and is lone personalization. And so something I’m equally obsessed about with gaming is back in 201 I bought a pair of Nike ID trainers. Do you remember? You can customize them, you make them your own. And so back then, it just came to me like a flash and I ran into the studio and said: “Oh my goodness. Imagine if we could design a loan, just like I’ve designed these trainers. Imagine if we were  able to have a hundred thousands customers out there and they’ve got a hundred thousand different little loans that are configured for them. “

Personalized banking, banks sometimes say it exists, but it doesn’t, you’ll have 30 million customers and you’ll have only five loans for them. And that’s not personalized. Another thing that a bank would do is go: “Oh, you want to go from 24 months to 42 months. Fine.” But this is where it gets really interesting. Most banks choose: “Oh, you can pay that monthly.” But what we say is: “what about if I want to pay back every week? What about if I want to pay back every day?” Okay. You can do that as one parameter. So now, because we’ve got monthly, weekly and daily repayment structures, we’ve got three times more loans than any other bank straight away.

So what else can we do? We can edit off that loan further. Supposing you’ve got a five-year loan and you decide you want to take a repayment break in the middle for six months. You can. This is the demonstration version. You could work out where you’d worked to take that repayment break. You can make it five months as you’re taking a payment break., the APR is changing as the consumer. You’re in charge of that. You’ve decided you want to repayment break for six months, you’re happy to pay more APR because for six months you don’t want to be paying that 247 pounds. Immediately  the number of loans that can be configured, you’ve completely changed it.

And so that becomes personalized banking because I just showed you some personalization configuration features of bank can add in whatever they can dream up, they can put into that product because we’ve got this feature within our contracts that are in the heart of Vault called parameters. And you can just keep loading those parameters in. You’re still in control in the bank of what the end product is, of course, because you’ve actually just got a few different APR, different types of products sitting there. But a customer has got the world in front of them of what they’re changing and then seeing the result of the cost of their load changing in front of them.

Marcel Klimo [26:18]

Somewhat I’m like in disbelief and shock why more banks aren’t doing this or why this isn’t happening?

Mark Warrick [26:25]

 Look. I think, like we said earlier, it’s one of those industries which is just entering this world of art. Computing existed for a long time before we really saw the arts come through. Like I referenced earlier, the iMac G3, that’s quite late. It’s a lovely machine, but it’s not really beautiful. It’s very broad if you like, which has obviously got its own beauty. But in terms of fashion and arts and exploding out there that the G3 took a long time. We’re in the world of finance. It’s money, but it’s quite a slow movement environment anyway. So my theory is that it’s happening. You’re going to start to see this happen and it’s not that expensive for an avatar like that to happen. It’s just having that leap of faith, that fashion and art is going to help you win consumer market share. And the banks that start doing it first and we’ll start seeing it happen and then others will follow.

Marcel Klimo [27:14]

So you said it’s not that hard. So what sort of technologies will the bank or FinTech or an institution like this need to get to where you are with either Nestlums, Nestling.

Mark Warrick [27:24]

They don’t need much. It’s about the leap of a design team that is doing that, okay. So I think there’s a very different type of design team that does a super app design versus this type of design. It’s almost, you need a design team that’s done monument valley, a design team that is working with the likes of Facebook with the go-go box that they’ve just launched. All of that sort of stuff. That’s the sort of design community, it’s about people. Yeah. But then in terms of the technology, it’s cinema 4D. It’s obviously Adobe creative suite. It’s blender, a lovely 3D tool. Then in terms of getting that into an interface, unity is the place. And it’s harder to do UI well in unity, but you get all of the art benefits of it and you start to see some wonderful creative packages coming out for the likes of iOS and things. It’s not going to be only that you’ll have to rely on unity to get the results that we’re starting to see with .Your probably you wouldn’t be able to do that with Nestlings and things, but certainly what I showed you with reduce of that, is skin reducing with Vault Rare with its avatar, like flubber like you said.

That , they can be done in the native world, no problems. But it’s about the leap and doing that. And for me, it’s about associating your brand with it. So when Santander bought out Money Monsters, it was great because they’ve realized that 95% of that brand was Money Monsters. But then the trust  came from this little bit that was brought to you by Santander.And when we did all the testing, that’s all that the customers needed was like; ‘Oh, so who’s behind that? Oh, it’s Santander.” But you don’t want centered as whole brand over that product, cause it’s Money Monsters.

Marcel Klimo [29:00] I

 guess a large part of that also is the capability of the bank to have the APIs like Vault. We as Vacuumlabs, we’re an engineering company. So a lot of what we do is we integrate like these disparate parts of banks or fintechs to try to make them work together and really put out a nice app forward for the client, because you don’t want that client waiting a day. You want to inform them. So a part of that really is having to somehow modify the backend,

Mark Warrick [29:22]

yeah. Look, I think a big reason, and that you’ve absolutely hit it on the head, the reason why banks and even challenger banks haven’t been doing this today is because of legacy banking side. We all know it. It’s not like there aren’t people in these banks that have got these ideas. They have them. But like I said earlier, the idea it takes a week and then 1% inspiration, 99% perspiration. It Is such an effort to get things out there. Now, the legacy banking tech stops you from doing that. And these days over the last five, six years, we’re seeing a big change as that isn’t the case anymore. And most banks in the world, or one of their top 10 initiatives is replacement of core banking.

So it’s an enabler. And I think the reason why we’re seeing more experimentation coming into banking is because there’s the confidence to experiment knowing that now they can actually make that happen. And absolutely, you need that technology based there. So bankers have always had this, there’s no point inventing anything. Because whenever we go: “Oh, can we get that real time from the legacy core?” “No, you can’t.” To your point, I think this industry, it’s being woken up artistically because we’ve now got the technology to be able to do these things. Absolutely, it’s a huge impact moving on from the legacy banking term. And I think the important thing is, with all of these projects There’s a high risk they’ll never get in the market. They’ll never make it. But that’s the price of innovation. You’ve just got to keep doing it. And good things will come. There is a lot of lessons learned from world-class design studios out there where they just kept going and it was relentless within venture and ridiculous failures.

Marcel Klimo [31:00]

So, from your experience, something that you can share, the mistakes that you’ve made, or the things that you’ve learned that you can share that others can benefit from.

Mark Warrick [31:07]

I think the biggest thing is a lot of people say it’s around the resilience around failure. There’s been a lot of things in the studio where we’ve just had to with heavy hearts, just go, we need to stop. And we’ve got to stop because it’s just not going to do it. I made a huge decision to get half of our studio working on what’s called code name Roma and code named Roma stops a lot of other projects, but I need that as a backbone. And it’s our first internal bank if you like, model bank, so that I can then start showing inventions on top of that. And it’s actually very much the saying if super app isn’t the future, this is the future. If we’re going to say that we want to show the industry what the future of banking might be like we’ve got to show them in entirety, not just with singular apps. We’ve got to show them how it all comes together. Lots of lessons there.

And I think the other lesson that I would say is some ideas in that first week where you’re coming up with them and that 1% inspiration moment when you’ve got 99% perspiration, you just got to keep them to yourselves for quite a long time and not show them. Someone I used to work with called a baby tiger moment. That’s just not ready. And you have to spend months in isolation, quite lonely in your team, making something that you just don’t talk about until it’s ready to show. And so there’s a lots of psychological side to a creative studio to be successful. And I know that’s quite generic, but there’s big lessons there. And in banks, I imagine, with all of the structure, there might be a lot of traffic going. So what you, what are you working on? It’s been three months. What’s the lab come up with? You just can’t do that. And I don’t have any of that, in Thought Machine I’ve got pure, complete freedom, complete leadership buy-in, board buy-in, finance. That is all the elements that you need to make it right.

Marcel Klimo [32:48]

There might not be an answer to this but how do you know it’s ready?

Mark Warrick [32:51]

Very interesting. I think it’s a team moment to say, let’s take it out of the studio and start showing it. But you’re right, it’s very different for every single project and yeah, it can suddenly be shot down. And so I think that you’d need to lay that baby tiger moment. You’re like, can it fight for itself? It’s the thing. Can it survive up there by itself? Or is it weak and it’s going to end up getting gobbled up? Though it wasn’t really ready yet. Very hard to answer that.

Marcel Klimo [33:17]

So you got Nestlums, Nestlings, Altar, and others. Almost none of them had like traditional badged progress bar structure with leveling and that sort of things. I guess it’s hidden under the hood, but is that an intentional choice?

Mark Warrick [33:29]

It’s a common mistake when someone or an industry says they’re going to do gamification. What they do is they go for the game mechanics. They go: “Oh, leveling. Oh, progress. Badges.” And what they forget and this isn’t to make it sound derogatory, but just in general, what’s forgotten there is what makes Pokemon successful is the characters. No one’s going to go on a hunt around Pokemon if there’s no characters. What makes world of Warcraft successful is the universe, the story, and being able to explore that. Game mechanics, they just won’t succeed. It’s going to dry up very quickly.

And you’ve got to have something to buy into. And the reason why we like escapism and why gaming become such a massive industry is because of the escapism or characters story, everything else. And I think in our money, we need to escape a little bit. And at the moment we’re just told there’s your number, go into your banking app. This is one of my pet hates with banking app to solve in journal list. I want to go and pay a friend. So I’ll go into my banking app and I’m immediately presented with all my accounts and my mortgage and my loan. And I want it to just go in and pay a friend, but you’ve just now told me things that I didn’t really need to know right now. It’s not what I wanted.

And yes. The big  thing is, t’is immersive and it’s about the avatar. And why not? So Silo, saving and investments has beautiful solar system. That’s important. And you’re investing in that as much as a level or a badge or anything else you’ve achieved.

Marcel Klimo [34:54]

Yeah, a friend of mine here in the CEE, he’s a founder of one of the local marketing agencies and he started a couple of businesses. And anytime I speak with him and when he’s talking about the new client that he’s working with, he’s always trying to figure out a way of getting some form of mascot or avatar into the marketing. Whether that’s a funny animal or something that represents the brand. And he’s done this with multiple businesses, that really reminds me of what you’re saying here. It’s you’re not trying to force the mechanics of fun of the brand, but rather you’re trying to implement something that represents the brand in a more human more…

Mark Warrick [36:13]

Yeah, I mean I don’t think we can deny what we said earlier. All children want to see monsters. We relate to characters a lot and brands, when it comes to consumer marketing, characters  do win a lot. You look at EDF with their little creature on the side of vans and things. It’s endearing. And there is a connection that we have with that. And so when it comes to the game side of things and saving free play, if you’re going to play, that play can’t just be a UI. That’s just a progress bar. You’ve got to play something and say: “Hey, I’ve got a character. Oh wow. They’re in that little world there. How can I make the world a little bit tidy or for them?” And it doesn’t matter where you’re from, what age you are. If you’re into that gaming side of things. You’ll be into that. Yeah.

Marcel Klimo [36:10]

What would you say if somebody just said, this is for kids? I don’t believe this.

Mark Warrick [36:14]

Yeah. They’re same people that say they don’t play computer games. And that’s fine. And that’s my point is that there is an app for every different type of market and game world savings is only really for people that like that sort of thing. And as we know, there are a lot of gamers out there and they like that side of things.

Some people will prefer Silo of course, when it comes to saving. Because it’s a sophistication, it feels like it’s in control and everything else. Some people might like Nestlings. Some people might like a very different type of app. This is the point of the conversation around super app is if you try and keep making every single experience, this bland UI, you don’t really excite any market. And it’s a bit like going down the high street and choosing coffee. If we all didn’t care about coffee, there would only be Starbucks. But there’s not. There’s independent coffee shops. There’s this, there’s that. And then there’s a time and a place to go to your user interface and what to do something, go and get a Starbucks. But there’s also a time and a place to just go into a really lovely coffee shop and have a very different experience. But at the moment what we’re doing is we’re just going we know it, you just want this. So yeah, my answer to that is that’s the market.

Marcel Klimo [37:23]

Beautifully said. So people listening to this now, they’re potentially decision-makers or potentially people who would like to see something like this being built within their organization. Can they come to Cauldron and say: “We have ideas or we really like Nestlings. And I think it really fits in with our brand here.” Can they come directly to you or are you more of an idea house?

Mark Warrick [37:45]

They can. And that’s the point of creating the Cauldron brand now is to say, it’s to reach out into the market. Regularly we get inbound traffic say: “Hey, I really like this concept that I’ve seen on a podcast or seen in the exhibition that you did virtually last week. Is that available?” We’re always open to that sort of thing. I think the thing that we don’t do, and this is why we are partners with us too, is when it comes to getting a project out into the market at scale into production, Cauldron  is alchemy of people. It is an invention hub. It makes things. And then it says: “If you want them, there are routes to market and you can take all the assets and buy the concepts.” But you need to work with the right teams to get these things productionized because it would just wipe out our whole team. And then we wouldn’t be able to invent.

Marcel Klimo [38:32]

Quite literally a Cauldron.

Mark Warrick [38:33]

Absolutely. That’s why we chose it. Yeah. Everything goes into the cauldron and there’s magic there. No, we really enjoyed coming up with that name. We all laughed our heads off when it was mentioned, we just got to do it. So it’s called the Cauldron.

And also something for the future – it won’t be long now, everything that we’re building Nestlings, Vault Rare,. .. We’ve realized over the years that we’ve made something common, that means  all of those can be actually realized. And that common  it’s phased as a channel. We’re calling it Randevouz. And it sits on top of Vault and that’s actually innovation tooling that we’re going to start offering out to  agencies ,  bank innovation teams. So that they can hit the ground running just like we’re doing at the moment with Nestlings, et cetera.

Marcel Klimo [39:11]

Mark, I just would like to thank you for bringing this into the world because it really needs it. It needs to rejuvenate, especially now when we’re all very distant and we’re not with each other and we’re working from remote locations, having this sort of art in this world is magical. It’s really that wonderful. So if somebody wants to either reach you, yourself, or reach Cauldron, what’s the best wait to do

Mark Warrick [39:32]

so I’m really hot on my LinkedIn. I always get back. A lot of people talk to me vie LinkedIn.

Marcel Klimo [39:37]

Perfect. Thank you so much for your time, Mark. We also had a podcast with Paul Taylor, the CEO of Thought Machine where we talk deeper around Thought Machine. So that might be an interesting thing for others to hear, but I really thank you for today’s conversation and I hope we can speak soon.

Mark Warrick [39:50]

No, absolutely delighted and thank you for having me on it was an absolute joy. Thank you.

Marcel Klimo [40:00]

Thank you for listening. If you liked the episode, please don’t hesitate to like, subscribe, review, download or share it. My name is Marcel Klimo and I’m from Vacuumlabs. And we’ll be back soon with another episode that will give you new insights into digital banking.


About Vacuumlabs

Vacuumlabs provides teams of flexible software engineers and designers with years of experience building fintech, online marketplaces, and digital products. Every step of the way, Vacuumlabs experts collaborate with clients, so that they can move fast, learn and iterate as they build world-class products together.