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Quest Means Business
Kenyan President Denounces Treasonous Protesters; Barack Obama's Half-Sister Teargassed During CNN Interview; EU Threatens Microsoft With Major Antitrust Fine; Monzo Reports Annual Profit On Expanded Lending; McDonald's Debuts $5 Value Meal As Shoppers Cut Back. Aired 4-4:45p ET
Aired June 25, 2024 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:08]
RICHARD QUEST, CNN INTERNATIONAL HOST: If you can't beat them, join in. Clapping as the closing bell rings on Wall Street. They enthusiastic at
Navigator Gas, but actually the numbers are not that impressive. The Dow is actually off the best part of 300 points, down 293 points.
If there's a gavel, well, it has already been hit. The gavel being knocked down on Wall Street. Bad day on the market, or at least not brilliant. We
will explain the reasons why, and the main events that you and I will get to grips with.
Kenya's president is condemning criminal protesters as anger over tax reforms turn deadly.
Microsoft is the latest US tech giant to be threatened with a massive fine by Eu regulators.
And Airbus shares falling as production delays are rippling across the entire air industry.
Tonight, we are still live in London. It is Tuesday, June the 25th. I'm Richard Quest and I mean business.
Good evening.
We start tonight with Kenya's president. He is decrying what he is calling treasonous events in Nairobi as demonstrations in the Kenyan capital turned
violent.
Rights groups say five people were killed and dozens were injured as the police clashed with the demonstrators. The protesters stormed the country's
parliament and Nairobi's city hall, it was set blaze.
The demonstrators began in response to proposed tax hikes. Kenya's president said he will not bend to criminals.
(BEGIN VIDEO CLIP)
WILLIAM RUTO, KENYAN PRESIDENT: I hereby put on notice the planners, financiers, orchestrators, and abettors of violence and anarchy that the
security infrastructure established to protect our republic and its sovereignty will be deployed to secure the country and restore normalcy.
(END VIDEO CLIP)
QUEST: Larry Madowo has been watching it. He joins me from Nairobi.
How will those comments, how will they go down with not just the protesters, but with people in Nairobi and in the country. Will they
welcome this strong line being taken by the president?
LARRY MADOWO, CNN CORRESPONDENT: Richard, we've already seen some reaction from some of the young people who have been out on the streets protesting
and they are not taking them lightly. They feel insulted by President Ruto's comments calling them criminals when all they wanted to express is
the anger at these proposed tax measures and the over taxation of the government of President William Ruto.
One of the most extraordinary scenes today was live on CNN, Auma Obama getting teargassed by police. She is the half-sister of the former US
President Barak Obama. She wanted to be out here on the streets to support the young people that are fighting for their future.
I spoke to her and this extraordinary moment happened live on CNN.
(BEGIN VIDEOTAPE)
AUMA OBAMA, ACTIVIST AND HALF-SISTER OF FORMER PRESIDENT BARACK OBAMA: Young Kenyans are demonstrating for their rights. They're demonstrating
with flags and banners. I can't even see any more.
We are being teargassed.
MADOWO (voice over): This is the moment the half-sister of the former US President Barack Obama was teargassed while live on CNN.
Auma Obama, a Kenyan British activist who lives in Nairobi among crowds of protesters on Tuesday.
Kenya in the grip of a "total shutdown" in response to a controversial finance bill, which includes proposed tax hikes on basic goods, including
sanitary products amid a cost of living crisis.
OBAMA: These young people need a future they have no jobs. Over 50 percent of our population who are under 35 have no jobs. We cannot tax -- taxing
them without no jobs. We are taxing the jobless.
MADOWO (voice over): The protests are part of the country's "Seven Days of Rage." Tuesday's event turning deadly with policemen hitting and detaining
demonstrators, even resorting to live rounds to scatter those who want their voices to be heard.
MADOWO (on camera): The bill which sparked these protests and led to this destruction is seen as an added barrier for those already burdened by the
high cost of living.
The anger and tension is felt across the country with people like Auma standing up for what they see as injustice.
MADOWO (voice over): Auma Obama has long used her voice to protect the rights of others, building a Kenya-based foundation, Sauti Kuu from the
ground up to help orphans and young people in poverty.
Her voice became elevated after her younger half-brother, who she first connected with during her 20s was elected to the White House in 2008.
[16:05:07]
She was born in Kenya, the second child in Barack Obama, Sr.'s first marriage before he moved and remarried in the US. Barack Obama often spoke
of their close relationship, reflecting in his book about the trips that Auma thoughtfully organized for him, allowing him to introduce his
daughters to his father's ancestral homelands.
Homeland that Auma also welcomed him to as president.
BARACK OBAMA, FORMER PRESIDENT OF THE UNITED STATES: It was Auma who first guided me through Kenya almost 30 years ago.
AUMA OBAMA: We have to do it for ourselves, no matter how little you have, no matter how difficult your circumstances, you can still succeed.
MADOWO (voice over): Her words from nearly a decade ago translating once again into action on Tuesday.
AUMA OBAMA: Look at what is happening.
MADOWO (voice over): Her anger and determination felt by many.
(END VIDEOTAPE)
QUEST: So, Larry, the scene is set in a sense for what comes next and the protesters that don't seem likely that they are going to go away, but what
can the president offer -- I mean, the economy is in deep, deep trouble. What can he offer to keep them quiet?
MADOWO: He will have to figure out a way to compromise on this finance bill, which the protesters want completely thrown out. They have made some
amendments, reduced -- removed some of the more controversial aspects of it; taxes on vehicles, on sanitary pads, on bread, but that has not been
satisfactory to the protesters and they had called for these Seven Days of Rage. Today was supposed to be a total shutdown and on Thursday, they will
try and go to President Ruto's residence, to State House to occupy the State House, and as we heard from the president, he will not allow that to
happen.
Security forces will not allow that to happen. So likely, this is only escalating.
QUEST: Larry in Nairobi, thank you, sir. It is late in the evening for you, but we are grateful for your time. Thank you.
For the second day in a row, the EU is taking a shot at big tech. This time, Microsoft. And the accusation, it is violating antitrust rules.
The Commission says that Microsoft has tied Teams, which -- you're all familiar with them, I mean, Good Lord, we live our life with it in some
shape or form.
Teams, the workplace collaboration with its other products giving it an unfair advantage. Brad Smith is Microsoft's president as Teams has already
been unbundled.
Now, yesterday, the EU accused Apple of breaching its Digital Services Act. It is threatening to fine both companies 10 percent of their global
revenue, for Microsoft, that's a small fortune, $20 billion.
Clare is with me.
Clare, all right. I thought we had been down the road with Teams already and the EU, and Brad Smith seems to sort of suggest that they have been
down the road.
CLARE DUFFY, CNN BUSINESS WRITER: Yes, Richard, I think that's going to be one of the interesting things to come out of these investigations by the
EU, Microsoft says it has already made changes. It is already unbundled Teams and it believes that its in compliance with the DMA. The EU seems to
apparently disagree.
This is really similar to what we heard from Apple yesterday as well, saying that it has already made changes to be in compliance with the DMA.
And so I think it will be interesting to see whether the EU decides to buy that, whether these investigations began months ago, maybe these companies
have made changes since then. Does the EU agree to let them operate that way or does it say you need to make further changes?
The other thing that I think is really interesting, Richard, looking out into the future about this is I think we may start to see more sort of
fracturing of tech services by country.
We are already starting to see this. Apple has said it doesn't plan to roll out its AI services in the EU because it feels like they are going to be
not in compliance with the DMA, but I think more and more, we may start to see these tech companies have one set of services in the EU because they
want to be in compliance with the DMA and have different sets of services in the US and elsewhere, which could mean frustrated consumers in some
areas.
I think it could also mean real challenges for global businesses that operate across all of these countries.
QUEST: All right, put your over hat on, if you will, as a consumer who watches these issues. Is there a point -- I mean, if things go to the
fruition of which you suggest, two different versions, is it likely that in Europe, people will start saying, well, hang on a second we haven't got
that. They've got it over there.
I noticed that several ways, when I compare what I sometimes have on my US phone with what my European colleagues or UK colleagues have, we don't have
the same things. On one or other fields, they are getting left out.
DUFFY: I think it will be one or the other. In some cases, EU citizens may feel like they are getting more benefits. In the case of this Teams
unbundling, they may say, we don't want to have to buy Teams with the rest of Office 365.
But in the case of Apple Intelligence, those AI tools, they may say, wait a second, our US friends have these AI tools on their iPhones, we want those
as well.
[16:10:04]
So I do think it will lead to some frustration among consumers that they don't get the same services that people in other countries have
opportunities to access.
QUEST: Clare, I am grateful. Clare Duffy joining me. Thank you very much.
Now, Airbus shares closed nearly 10 percent lower after the company cut its 2024 guidance. Deliveries this year will be lower. The company says it now
intends to deliver 770. It is still a huge, huge numbers. They have been targeting 800 aircrafts over the year, but look at that, 75. That's more
than two planes a day.
So it also pushed back its timeline for ramping up production of the A320. Airbus now thinks it will reach that number in 2027, a year later than
expected. It is not a massive difference, but the important thing is it is setting a trend. It is giving reasons why.
New guidance adds to the challenges of the aviation industry, which has already dealing with Boeing's various problems.
Anna Stewart joins me now.
Anna, good to have you.
So, we have deliveries and orders. Now, we know that Airbus overtook Boeing some years ago, 2018, and has been on a march ever since.
ANNA STEWART, CNN REPORTER: Airbus has done extraordinarily well, all considered. But the issue for both of these airlines really is they just
can't produce as many planes as they would like. Their order books are absolutely packed.
Airbus has huge demand particularly for the family. We are talking about the A320, and these are largely issues out of Airbus' control. We are
talking about the suppliers here.
QUEST: Okay. If that's the case, the ability for the manufacturers, the OEMs as they are known, the Original Equipment Manufacturers to actually
influence. This is almost non-existent. They can't --
I mean, yes, Boeing can bring back Spirit, but it can't do much more than that.
STEWART: They've done a lot. I mean, they have sent engineers to the ends of the Earth to try and find out the problems with the suppliers, but some
of these issues aren't even in the supplier's control. It might be the metals, the high performance metals like titanium, aluminum that are
involved here.
So it is a really tricky, thorny issue that goes all the way from the raw material, right through to the aircraft maker.
QUEST: It is having an effect on airline prices.
STEWART: This is what I want to show you.
QUEST: It is coming to affect the airline prices.
STEWART: Because this is sort of what matters. This is what matters for anyone having a holiday this year.
QUEST: Right.
STEWART: They might be thinking, oh, that's a bit pricey. Let's have a look.
These are EU airline fares.
QUEST: Okay.
STEWART: And I want to show you the direction they are heading in, particularly against inflation because I think it is quite shocking
actually. You would expect them to go up, given the inflation numbers, but they are actually much, much higher than you would even expect.
Here we go. So you can actually see what is really interesting here is of course the pandemic dip and then how it recovers. You can see that yet, not
many people went to planes, then they went -- and then look at this. This is where inflation is going and that is your air ticket price.
QUEST: Right. So an element of this is clearly pent-up demand, people flying. But an element is that the airlines can't grow capacity because
they crank up the --
STEWART: Right.
QUEST: But listen to Carsten Spohr, all right.
STEWART: Oh, yes.
QUEST: Carsten Spohr, CEO of Lufthansa Group. He told me at IATA he was doing so somewhat tongue and cheek. But it is a point that people will make
that airlines are being saved from their own folly and misfortune because they can't get the planes.
(BEGIN VIDEO CLIP)
CARSTEN SPOHR, CEO, LUFTHANSA GROUP: This industry individually suffers from this lack of airplanes, but also, to be honest, it is the global
industry in general, we also of course, see the upside that there is no overcapacities currently, which we have seen so many years.
So I think there are three -- two views.
(END VIDEO CLIP)
QUEST: That is Carsten Spohr. I mean --
STEWART: One of several airlines to reduce their capacity outlook for this year, right? KLM, Ryanair.
QUEST: They can't get the 777s. They can't get the planes they want. They have admitted that they will have to cut back on route development and
their new illustrious business class because of it. All airlines are saying the same things. But at the same time, you do have those like Indigo which
have ordered 500 aircrafts.
Youve got these low low-cost carriers ordering the 320s by the hundreds, knowing they are not going to get them.
STEWART: And you have to put in your order now though, Richard. It is going to take years, but these are airlines who also face the issue of airlines
which are grounded due to various issues.
Engines that need to be inspected. There have been a number of problems on top of the fact that they can't get enough new planes and demand is high.
People want to travel, as I know, because I saw you in New York last week, in Dubai about three weeks before that.
QUEST: That shows the worry. Good. Thank you.
STEWART: Nice to see you, Richard.
QUEST: Nice to see you. Thank you very much.
[16:16:00]
As we continue tonight together, business and healthcare systems vulnerable to cyberattacks. The CEO of Okta is warning AI could add to the risks. He
is with me after the break, but only if he verifies himself.
(COMMERCIAL BREAK)
QUEST: The legal battle between Julian Assange and the US government is coming to a close after more than a decade.
Nic Robertson reports on the latest for the WikiLeaks founder, the plea agreement, and the way in which he is going free.
(BEGIN VIDEOTAPE)
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR (voice over): On his way to apparent freedom, WikiLeaks founder Julian Assange, bailed from British
jail and now hours from completing a plea deal with the US Department of Justice accused of playing a role in one of the biggest security breaches
in US history.
Assange was essentially on the run from the day his WikiLeaks first published US secrets in 2010. Initially, about the war in Iraq including
this video of a US Apache gunship killing Iraqi civilians and two journalists.
His next release, thousands of secret documents about the Afghan war. Then a massive data dump of sensitive global US diplomatic communications. Tens
of thousands of secrets in the wind, lives of spies potentially compromised.
DONALD TRUMP, FORMER PRESIDENT OF THE UNITED STATES: WikiLeaks, I love WikiLeaks.
ROBERTSON (voice over): Perhaps most consequentially, while on the lam in London in 2016, publishing leaked e-mails from the Democratic National
Committee and Hillary Clinton's campaign manager during her presidential election campaign against Donald Trump.
For 14 years, Assange was a fugitive. First fleeing Sweden following a 2010 arrest warrant linked to rape allegations, which he denied, landing in the
UK soon facing extradition back to Sweden, eventually jumping UK bail in 2012, taking asylum in the Ecuadorian embassy in London.
Ultimately, wearing out his welcome, expelled seven years later, promptly arrested, taken to the UK's maximum security, Belmarsh Prison, facing and
fighting extradition to the United States and now here, not in a North American courtroom, but in the US district of the North Mariana Islands, a
territory of the United States in the Pacific Ocean en route to his Native Australia.
[16:20:17]
His last hurdle, he must plead guilty to one count of obtaining and disseminating classified US information linked to US National Defense, and
then, he will go free for time already served, 62 months in a tiny UK jail cell.
His wife, who is also his lawyer and mother of his two children who was outside his UK jail just a few days ago now waiting for him in Australia.
STELLA ASSANGE, JULIA ASSANGE'S WIFE: It will be the first time that I -- that I get to see him as a fully free man. All this is -- it is so alien to
the way we've -- it has been until now for the past 14 years.
ROBERTSON (voice over): His freedom, it seems in in part due to diplomacy.
ANTHONY ALBANESE, AUSTRALIAN PRIME MINISTER: Regardless of the views that people have about Mr. Assange's activities, the case has dragged on for too
long.
There is nothing to be gained by his continued incarceration and we want him brought home to Australia.
ROBERTSON (voice over): In recent weeks, Australia's prime minister increasingly advocating for Assange's return, the White House denying it
had any involvement in the plea agreement.
Ironically, Assange's get out of jail deal, a better kept secret than his historic leaks. He was on the plane heading towards home hours before the
news broke.
Nic Robertson, CNN, London.
(END VIDEOTAPE)
QUEST: Cybercriminals have pulled off some unsettling attacks recently in the UK and North America. Britain's National Health Service says hackers
behind a ransomware attack have followed through on their threat to publish confidential data.
The attack has disrupted services at several large hospitals here in London. And in North America, 15,000 car dealerships are handling
transactions using pen and paper.
Back-to-back cyberattacks on the sales software provider CDK Global.
AI threatens to give hackers easier access, also like misinformation, phishing, and deepfakes. According to the IT security company, Okta,
business leaders are worried its new service shows half of them feel only somewhat prepared to fend off AI-driven attacks and 14 percent consider
them AI experts.
Todd McKinnon is the CEO of Okta. He joins me from San Francisco.
You know, when I heard and when our producers heard you were on the program tonight, everyone was thoroughly delighted. I mean, we are using Okta. It
seems to be -- no moment of the day is complete without having been verified by you in some shape or form.
And I suspect, it is going to have to get a lot more of that if we are going to be safe under AI.
TODD MCKINNON, CEO, OKTA: Yes, absolutely. We have over 19,000 enterprises around the world that rely on Okta and what we do for them is identity
management.
So anytime a person needs to connect to a business application that are employed to do their job or a customer needs to connect to a website to
help them log in and get a great user experience, we do that and we power it for great companies like CNN, but also FedEx and Wyndham Hotels and they
all have this challenge of they want to make things easy when the people logging in are the right people and they want to prevent threat actors from
logging in.
QUEST: So why will AI make cybersecurity worse in your view?
MCKINNON: Well, the first thing it is going to do is it is this amazing technology wave that is going to lead to a whole new round of amazing
applications and capabilities and whether it is your mobile device getting way more capable or its amazing chatbots like ChatGPT from OpenAI, we are
all going to have way more technology, which is good, but that also has to be secured and the threat actors are going to migrate and try to take
advantage of those things.
And one of the common things they do now we see is that they fake voices, they fake videos to get past security checks and that is a big problem.
QUEST: So to the extent that you are on the frontline in a sense in this attack and identity verification, is your job getting harder because of it?
MCKINNON: It is an important job and the stakes are raising all the time. There is so much more information, so much more power in these applications
and information is driving the whole economy, so the stakes are very high.
[16:25:01]
We see two billion malicious attempts at our customers every month and we block those for our customers and our customers benefit from that and as
more applications get built and more capabilities get built into the fabric of businesses and consumer lives, that the stakes are rising, and we are
going to keep continuing what we are doing.
QUEST: But one always gets the feeling it is just a question of time. It is a question of when, not if.
So, for instance, I think my e-mail account, one of it was, suddenly I got hundreds of phishing e-mails from the same place, hundreds all within the
space of a few hours, which of course, easy in a moment of weakness, I could have clicked on, but one has to be at a level of vigilance that I
wonder whether that is possible at all.
MCKINNON: Yes, I think there is a requirement or its better if users are more vigilant and more knowledgeable of what is going on and certainly,
they have become more knowledgeable of phishing, but it is not perfect.
I think the big thing is, is companies providing technology or companies in the cybersecurity industry being more reactive and responding to when the
inevitable happens quickly with open communication and clear impacts of what was impacted, so users have the full story quickly.
Ransomware is amongst the most nefarious insidious because you just don't know whether to pay or not. It is very easy to take the moral high ground
and say don't pay when it is not your information or data that could be leaked, isn't it? Or compromised?
MCKINNON: Yes. I mean, the reason why it is rising in terms of the attack patterns is because it is such a hard decision to make for companies. They
are dealing with decisions about shutting down, having their business be shut down, having their people they serve with their products and services
being impacted and it is a tough decision.
I think the more we can put defenses in place proactively upfront, the more we can prevent those situations from happening.
QUEST: As a man from Okta who is probably nigh-on paranoid when it comes to the issues of -- I mean that in the nicest possible way when it comes to
issues of cyber security. Do you -- how do you, sir, you balance the requirements of cybersecurity with AI's potential for the future. Where do
you the balance of opportunity?
MCKINNON: Well, in general -- yes, I think in general, I think the right approach is to, for myself is to be a technology optimist. I think that
technology has done a lot of amazing things in the world and it will continue to do more amazing things, but that has to be balanced with a
dose, maybe two or three doses of pragmatism in terms of how fast you use new capabilities, the steps you take to be vigilant, lock those down as you
do use them.
So I think it is a good balance, but let's not forget the good things that technology has done and the great potential for our companies and for our
organizations going forward if we use it correctly.
QUEST: Please make my day, sir. Have you ever been locked out of Okta?
MCKINNON: Well, I get pretty good customer support here for my own internal IT team, so when it happens, it is cleared up pretty quickly.
QUEST: I will take that as a yes. Join the club, sir. Thank you very much for joining us tonight, Todd McKinnon of Okta.
MCKINNON: Thanks for having me.
QUEST: All right, now, don't think for one second that you're going to find any information. This is the company were going to be talking about next,
these little orange cards are all over the place in the UK. It is the digital bank, Monzo and it is valued at more than $5 billion.
We have covered every -- we think we have covered, we think we've covered every piece of data so that I can show you this card. More that we will
find out if we haven't.
The chief exec is next.
(COMMERCIAL BREAK)
[16:32:39]
QUEST: Inflation in Canada is hotter than expected, and the Central Bank cut rates earlier this month. Consumer prices rose 2.9% in May on an
annualized basis. The market had expected an easing of pressures.
The Bank of Canada was the first to lower rates amongst the G7. The ECB has similarly done it now. The BOE, meanwhile, Bank of England, held its
benchmark rate at a 16-year high.
Now, Monzo has taken advantage of the higher rates by expanding its business, particularly its lending business, and a success so far, with the
digital lender reporting its first full-year profit. Revenue more than doubled to 500 million. It's about $650 million.
Monzo says it was recently valued at more than $5 billion. The expanded lending has come at a predictable cost, setting aside more than $250
million for loan defaults. TS Anil is the CEO of Monzo.
Good to see you, sir.
TS ANIL, CEO, MONZO: Likewise, Richard.
QUEST: Let's just do the general economics first. The economy in the U.K. has been very tough lately, and that's made it obviously lending difficult,
but also provision for bad loans difficult as well.
ANIL: It's actually -- you're absolutely right, and the slowing down of the economy, the cost-of-living crisis, and so on, has put a huge amount of
pressure on the economy, but also, more importantly, on our customers. And actually, it's interesting that at a time like that, that more than ever,
customers need a Monzo, which helps them budget, helps them plan, helps them make sense of their money, and make it work harder for them.
QUEST: Why? How? I mean, a bank is a bank is a bank. You take the money in, you hold it, you pay a rate of interest, you lend me when I need it, and
you let me use this to buy goods. So why are you different?
ANIL: Where do I start, Richard? So we're a bank that lives entirely on your phone. We're a bank that is seeking --
QUEST: Do you have a helpline?
ANIL: Of course we have a helpline. There's humans everywhere. We make sure we bring the best of humans and technology to service you.
QUEST: Good.
ANIL: So we live entirely on your phone.
QUEST: Yeah.
ANIL: And what we're building out is this idea of a single financial control center where all of a customer's money needs are met in a single
place, and we're the UK's largest digital bank today, serving almost 10 million customers now, and if you think the -- about what we deliver to
these customers, we deliver a set of products and services that help them actually make better sense of their money, give them visibility, controls,
and the ability to make smarter decisions.
[16:35:00]
QUEST: You put it as -- you describe yourself as a tech company that is a bank.
ANIL: That's right.
QUEST: But I'd arguably say that once you get into the banking business, the regulation and the difficulties and the requirements and the funding
requirements and the reserve requirements are very different, and that can skew the benefits of the technology.
ANIL: So we're happy to be held to the highest possible standards. We chose to be a fully regulated bank because we knew this industry needed to be
reinvented from within. So what we're aiming to do is bring the best of technology and the best of banking together to create great outcomes for
our customers, to make them experience money like they've never felt it before.
What that means in practice is this idea that it's a simple tool like Pots, which was an industry first when we launched it. The idea that inside of a
single bank account, you can compartmentalize your money and save for different needs. A salary sorter feature, where the second the money lands
in your account, your salary lands in your account, it gets split up into different categories and different pots that you've already created. It's
things like that that help you actually make better sense of your money, and in doing so, go get farther along the way to your financial goals.
QUEST: You've got first adopter advantage in a sense, it's now the largest and you've been there a while, but other people are starting to move in to
eat your lunch. Chase, for example, Chase U.K. is making huge inroads and eventually the big four, the traditional banks, if there are still four,
they will move in. How do you stay on top of them when they've got branches, not as many as they used to, they've got name recognition, or
maybe this is the new cool.
ANIL: So I see this as a race, Richard. The size of the prize, the finish line is building a global company that actually can help millions and
billions of customers in time manage their money better. And it's a race between two segments of the market, the incumbent banks, the legacy banks,
some of them are hundreds of years old, and whether they can transform using the power of technology, or challengers like us, technology players,
and whether we can get banking and deliver on that.
So when the banking industry get tech over the tech industry, get banking is the race. And I would bet my money on us every single day because we own
the banking aspects as well. In the point I made earlier about being choosing to be regulated, we're saying we will be regulated and transform
this industry from within.
QUEST: But you do require to a certain extent and rely upon the traditional banking sector for certain functions.
ANIL: On the traditional banking infrastructure to the extent that clearing and the payment ecosystem works in a certain way.
QUEST: Exactly. So you do rely on that?
ANIL: On the infrastructure, not on the incumbent players necessarily. So the infrastructure that the country has, the clearing system as you, you
know, as you mentioned, the cheque clearing system, the faster payment system that exists in the U.K., all of that is the infrastructure that all
the banks are built on. That's not just us. Even the traditional players use that. That's it exactly.
QUEST: Now, I live in the U.S. most of the time where of course the banking system could be unfavorably compared to the developing world. It's so
antiquated with so many banks. But they are very good at things like Venmo.
ANIL: Sure.
QUEST: You know, cash app. They're very good at the instantaneous transaction because they've jumped in a sense they've leapfrogged the
banking system with these digital payment mechanisms.
ANIL: I love that the two examples you've given are not examples of banks.
QUEST: No, they're not.
ANIL: FinTech players solving a need.
QUEST: Right. Right, but they're being used by people on a daily basis.
ANIL: Absolutely. I think what's exciting to me about the U.S. market is that customers have -- in some senses fragmented their wallet. They go to
FinTech company X for this one need, to bank for that other need, for another FinTech company for a third need. But in doing so, that
fragmentation of their money actually puts them less in control and creates more anxiety.
So the power of Monzo is to bring it all into a single place and help you make sense of your money across budgeting and borrowing and saving and
spending and investing in insurance all in a single place.
QUEST: And I mean, you know, it's cool.
ANIL: It certainly is cool. And, you know, we're happy to do with where we're at right now. The future is really what we're building out right now.
QUEST: We'll talk more. I'm very grateful, sir.
ANIL: Thank you, Richard.
QUEST: Thank you very much indeed.
What can a burger, fries, and a drink tell us about the state of the U.S. economy? Apparently, an enormous amount. McDonald's, having been bitten
badly by the $18 Big Mac, is now trying to lure customers back with a $5 value meal.
It's reported declining sales and the customers are feeling the pinch with rising prices and cutting back on spending. Nathaniel Meyersohn is in New
York. This $5, what is that -- what do I get for it?
NATHANIEL MEYERSOHN, CNN BUSINESS REPORTER: All right, Richard. I'll tell you right away. We've got the new $5 meal, which is you got to McDouble.
You get some four chicken nuggets. You get fries. Delicious McDonald's fries.
[16:40:02]
QUEST: All right.
MEYERSOHN: And a soda. So this is how McDonald's is trying to get customers back after it's faced so much backlash on social media with that $18 Big
Mac meal that you mentioned.
But also, McDonald's is losing customers to grocery stores, to Walmart, to dollar stores. So it really needs a new strategy to try to lure customers.
QUEST: OK. But is this McDonald's genuinely changing its strategy, or is this a sort of, let's beat the competition, then we'll raise the price in?
Have they -- has the burger changed its spots?
MEYERSOHN: I think that you've identified kind of the key point here, Richard. If this was a significant shift in strategy, they would actually
lower prices. You would see the price of some of the core items go down.
But this is a limited-time offer. It's only, you know, for a month. And several of these other deals, the Wendy's $3 breakfast, the Burger King $5
value meal, those are also one-month deals.
So these are limited-time offers. They're not permanent changes. So it's less of a hit on McDonald's' bottom line. And McDonald's is able to do this
right now because inflation has gone down over the past several months.
QUEST: Were the big food, the big fast-food companies, were they greedy, pardon the pun, in letting prices get so high, or is it an adequate
reflection? These are complex supply chain companies with multiple expenses of institutions and franchises and all of that. I mean, were we wrong to
expect a $10, a $5 burger?
MEYERSOHN: Well, I think in the consumers' eyes, they were greedy. But if you ask the companies, they'll say their input costs were going up. But I
think the bottom line here is, Richard, is that customers were still paying for these higher prices.
They were still willing to shell out for these higher prices. But they reached a point where they were not anymore. And so McDonald's has seen
some of the demand go down. And so that's why it's adding this meal.
If customers were still paying the higher prices, the $18 Big Mac meal, I don't think that you would see McDonald's add this value meal. But because
they've pulled back, McDonald's needs to add it.
QUEST: I bet you've got pickles on that, which is --
MEYERSOHN: We've got it. We have one pickle here.
QUEST: No, no, no. No pickles. Did you just go away and eat that? Go and enjoy your pickles on your own. Nathaniel Meyersohn, grateful for you.
That's Quest Means Business tonight. I'm Richard Quest in London. Whatever you're up to in the hours ahead, I hope it doesn't involve pickles.
Coming up next, I'm in Osaka, where there's a ton of food, more food than you can shake a stick at. Cue the audio on World of Wonder.
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