Conference Transcript - MA 2026-06-03

Operator

Everybody good morning. Thanks for joining us for our chat with Johan Gerber for MasterCard now in EVP of Network and real-time payments that's been a month. That's right Formerly in security which is the largest piece of the VAS business which we're really excited about to dig into I think everyone just says security and kind of glosses over for a second and not really knows what's what's beyond it But look really looking forward to getting into some detail Well, first things first, though, a bunch of management changes announced yesterday. We wrote a note on it thinking it just really shows the depth and breadth of the management No exits, no new hires either, just kind of shuffling around. That's usually the sign of a great management team. And so we're very favorable on it. Love it. We'll miss Sachin as the CFO, because he was terrific, but looking forward to meeting Ling and getting in there. But I don't know if you want to comment on that. We were very favorable. like we didn't think it was any anything negative at all well first of all

Johan Gerber, Other

thanks for having us you know we're excited to talk about this as well this is such a big part of our portfolio especially of our value-added services you know security now is about 40% or sorry value-added services about 40% of the company's net revenue security solutions is a really big part of that but on the management changes to your point it shows the depth in the bench that we have and you know my role is actually a very good example of that too I was just I just moved from the running security solutions to running a real-time payments and network products and Ann Johnson is joining us from Microsoft as the previous deputy CISO who will now take over so that Rotation that ability to have people who understand the breadth of our company to look at problems in different ways I think that's a real real area of strength that we can bring and then you bring new talent in from time to time To just help upskill and help us accelerate more So I think we are from a company point of view that the staff are very excited that we all know these folks. We know what they bring. And they bring a very strong rigor into these disciplines.

Operator

That's good color. Congratulations.

Johan Gerber, Other

Thank you. From one great company to another one.

Operator

So let's talk about VAS a little bit. It's obviously around 40%-ish of total revenue, as you mentioned, growing healthy. Maybe just give a broad overview of where security sits within the portfolio. And maybe just give a couple bullet points on the rest, just to level set for everyone and then we can really dive into security so if

Johan Gerber, Other

you look at our vast portfolio and maybe I should just take a step back to a point it's about 40% of our net revenue of the company which is a big deal and we've had a very strong you know history of growth in that are performing the rest of the of the company being that value additional value accelerator and revenue accelerator so it is a really strategic part of what we want to do the security solutions portfolio is a big part of that the largest part of our vast portfolio but let me just quickly talk through how do we get to these things you should think about our vast portfolio as a highly curated set of solutions and categories that we've been working on and they have a couple of really important aspects to them we talked a lot about the virtuous cycle about how through vast we want to increase the value of the mass card portfolio so we win more portfolios you increase the number of transactions you increase the data and you get that virtual cycle flowing so that's everything that we do with in VAS is strategically positioned to drive that virtual cycle to start with then look at them as well from a point where we only create these vast services where we know these real customer need the customer need is important there's a big time so it's big enough for us to go in and we can really scale and then that we have some structural tailwinds that will help us accelerate the growth so these are some of the fundamental building blocks in terms of how we choose what goes into the portfolio and if you look at the portfolio itself we've got customer acquisition and engagement which is about how do we get more customers onto our banks as portfolios how do the acquirers get more merchants of the the issuers get more cardholders as you can understand that's a core part of our we help our customers grow which is another important part of this a lot of what we do here is to really help drive our customer strategy you know we are the facilitator of growth and just playing a very key critical role in that and that's a that's a really important part of why we believe we want to be relevant at all times is to help that accelerate that growth so we've got customer acquisition and engagement then we've got what we call our BMI services which are business management and analytics area this is where our advisors group sit this is where we do a lot of data analytics with our customer a lot of customization work happens here we will go in there we will look at our customers data will analyze it will help them to define their strategies will help them with anything from how do you build an agent to you know create a new strategy in the business this is also a create a very important part of our acceleration and personalization of our services you've got technology and then you've got the humans to kind of help make that work and so that cycle itself then turns into how do I generate sales for my people that are in there and so you can see how this is also important it's technology plus people in the BMI team that we have there then you've got security solutions and we'll talk about that in a lot more detail as we as we go through the rest of the conversation. We also have a range of other services where we have our digital solutions like tokenization, authentication, our gateway solutions that we have in there. And then lastly, we have our real-time payments components as well and all the services that we do around those areas as well. So that's a little bit of the portfolio of our services that we have in total.

Operator

A really broad array. So let's, you said that security was the biggest piece. So let's talk about that for a little bit. I think most people think of security and payments, especially when MasterCard involves tokenization, and don't really know what else to talk about after that. So I put down my MasterCard card, whether it's online or physical point of sale. I assume it's secure. There's a token. I see the chip. Everything's good. Most people outside of payments wouldn't understand what else is involved. So maybe we get into that a little bit and maybe just give a broad description of what security is, and then we can really dig it.

Johan Gerber, Other

This is where I can camp out for a whole day, you know that. This is my... But let's talk about...

Operator

That one's going to get us off the stage.

Johan Gerber, Other

He will get us off the stage. He's bigger than us, so he's going to take us off. That's indeed true. So if you look at our security solutions, maybe let me just start there. In addition to what I said earlier, this virtuous cycle where we see more transactions as we run more portfolios and that enhances, you've got that organic growth that we drive that's helping us in our security solutions. There are also other two sources of growth for us in security. there's the constant evolution of technology agentic great example these things need to be secured they need new technology they need new types of data they need new solutions in there and then you've got the frauds that are changing you know the criminals are changing their ways in which the attack as well so you've got two sources of growth in addition to the to the organic growth that we want through that virtual cycle this is why this is such a big opportunity for us the time is growing and it's very relevant to the success of this of the service the ultimate goal of security solutions is how do we help our customers to sustainably grow their portfolios execute against their strategies in a sustainable way you know we're not we're not out there to just say hey we want to reduce fraud to an absolute zero we want to be mindful how do you balance all of these things to create the best set of growth with it with it with the right amount of risk and if you think about our portfolios we have thousands of customers and thousands of portfolios every one of of those portfolios have different risk appetites. So within these opportunities, there are a lot of customization that needs to happen. And that's where our advisors' teams comes in. How do we help customers use all of those security solutions? Let's go a little bit deeper into under the hood.

Operator

Can I just stop you right there for a sec? Because I think it's important. People understand what you said on a macro level. But coming from an operating background, take me into the room of you sitting across the table from an issuer. Yeah, and they say hey we want to grow our program MasterCard help me, right? So you're the go put your old hat on you're the security guy Your turn comes up in the meeting to speak like what exactly are you speaking to a bank about how you can help them grow great example?

Johan Gerber, Other

I solicit stick We're sitting with a bank who is about to launch a new portfolio Yeah, we look at what are the what are these strategic objectives of this portfolio? You want to go after the Super affluent you want to go after the mass market you want to go up to your subprime whatever the strategy you want to go after business customers you want to go after a specific type of segment of the market then we look at so if that's your target market what is your strategy do you want to create the best experience do you want to create the lowest cost you so all of these business strategies from our customers gets in goes into the box and then we will say we can now let's look at our tools we've got fraud scoring we've got things to help you do better authentication better account opening how do we curate the set of solutions very specific towards that portfolios vision and strategy that you want to execute against and that's where we play in a great example is we recently sat with a customer who's launching an affluent portfolio and said these customers have to have the best experience at places like dining travel and so forth and then in our fraud solutions we will make sure that we curate very specific rules where for another transaction I might say if the score if the fraud risk is above X I'm going to decline but for these categories in this portfolio I'm gonna say don't decline maybe just send them a text message and so these are very practical they go down into a lot of detail but that's gonna do the level of detail that we can go into with our customers and that's why you part of their growth strategy you're not just somebody that comes to supply a piece of tech and then walk away you're in there and that's where that virtue cycle is so important we measure ourselves then does the portfolio perform in the right way not necessarily the product the product has to perform otherwise the portfolio will not perform but the bigger the bigger picture is the mascot business that benefits from this we used to call

Operator

it a sleeve when we were building our software but it's not really a sleeve it's more of like an instance specific for that issuer so they will have almost like a dashboard and you're adjusting the dials on the back end saying for these transactions this is what we're gonna do here's how we're gonna do multi-factor authentication if necessary and all that and for that specific initiative for that particular issuer that will be the program that that we

Johan Gerber, Other

Correct, and then you know from time to time we'll go in there and we'll evaluate. Is it performing? Is it doing what it's doing and do we need to put tweaks in there? And so we offer we offer a range some of our customers are highly sophisticated They can do a lot of this themselves some of our customers are like please help us Yeah, and do this on behalf and so we've got a range of where we do from here We provide to the solution and we provide advice to will actually actively help you manage this and Continuously evaluate the performance of this so that's why this is so so deeply ingrained into the strategy of the broader of the broader

Operator

mastercard portfolio and all that is within the security that's all within

Johan Gerber, Other

the security now you can extend that the same way to our customer acquisition engagement as well as we launch that portfolio how do and this is where it's actually a great great the lifecycle when we launch a new portfolio with a customer the first question is how do we get consumers to adopt this new brand our customer acquisition and engagement team gets in there and say how do we design loyalty how do we design the the traction where do we target is a social media what kind of methods do we use to advertise this how do we onboard these things our identity solutions sits there how do we make sure that your account opening and onboarding onto these onto these accounts are as effective and flawless and seamless as possible and then once they start using their trends their cards how to make sure that their experience is rock-solid in terms of don't decline them when they're trying to book an uber for $20 or try to get to the airport and they late and then ultimately at the end what happens if something goes wrong so we've got a whole suite of dispute solutions and we should talk about ethical a little bit the company that we acquired about ten years ago just growing phenomenal they are there to say how do we how do we handle the when something goes wrong first of all how do I make sure that the digital receipt is in my banking app to avoid an unnecessary call into the into the into how do I manage my subscriptions instead of when I can't get hold of the of the company where I want to cancel or change my subscription so these are let's refer out the lifecycle of account launches but also the transaction life cycles as well and that's why this is this is not an abstract that sits outside it is deeply ingrained into the into the broader into the broader strategy of the company and our portfolios you said

Operator

there are two growth vectors really driving security right what is on new technology like agentic yeah let's really dive into that a little bit today I make a transaction I authenticate it maybe I get a text if it doesn't it's not really sure it's me or whatever how do things change with a when you have an agent standing in front of the ultimate authenticator now

Johan Gerber, Other

it gets a it's a so we're looking at this as a great opportunity of course in terms of the new business models this will create for companies for startups to create agents and so there's a there's a this is just the white space in terms of what this will do and how this will transform the way in which we as consumers you know communicate with each other consume products do commerce is fantastic but if you look at the security around this there's a whole chain of evidence that we need to pertain. I'm an old cop, so I talk about these things as well. But if you think about the parties in an agentic transaction, you've got the human, you've got the human's agent, then you've got perhaps the merchant or the merchant's and or the merchant's agent that's in there as well. And of course, you've got us. We need to make sure when the agent receives a request, the agent needs to know this is real human. This is not an account that was opened with a synthetic identity. So I need to verify that the consumer is real. The consumer when they're interacting with the agent needs to know I'm dealing with a real legitimate agent. When the agent wants to buy something from a merchant, they need to know that merchant is real. Because think about this, you know, how is it for a criminal to start a business, register it and advertise to any agents out there and say, I've got the cheapest pair of shoes or I've got the cheapest travel. So there's a lot of work that we now need to build in to say there's integrity in this in this flow And it's not just the agent. It's not just that it's not just the consumer It's everybody in that chain. We need to verify and so we're looking at how do we digitally? Reinforce the trust and the integrity of the chain of Data flow across this areas and then if something goes wrong How do you how do you how do you clean it up? Because we've got this and you might have read about this. We talked about verifiable intent where when the consumer asks the agent to do something that request that instruction gets encrypted with the cryptography and signed with the cryptographic key and we call that verifiable intent if something goes wrong that thing can get unlocked and be showed to the consumer again and say this is what you asked the agent this is what we see what happened can we do this and our ethical is the is that is the is the solution that actually will deliver that from the place where you talk to the agent to where you're in your banking app and say I don't recognize this transaction this is not what I asked I'll say well let's show you what you asked and they show you what happened here and then so this is how and this is why this opens up so much opportunity on new technology evolution that we really have to secure that entire chain then I

Operator

tell you if I ever get asked the question from an investor why is MasterCard not going to be displaced by agentic I want to take that 90 seconds and just play that because I think you summarize it really well no one sees the entire end-to-end transaction from the consumer to the merchant end more than a network right so the fact that you can authenticate it every step along the way you know it ends for your

Johan Gerber, Other

your I know we're going into a whole lot of detail here but I'm glad we did we are we are because if you're a merchant who has to do doing a lot of sales by an agent and you have to deal with a consumer disputing a higher in the normal amount even 1% or 2% of your sales the amount of That you have to put in there so these things are designed not just to safeguard and secure But to make the operations flow with at least cost as possible and that's why you know I will keep coming back on these things are facilitators of growth if you look at the I call this the equation of growth But if you have utility You can have growth if you have utility plus trust you've got a growth acceleration And that trust is the component that we want to put in the middle here And it's trust to say I can trust us all the way through and if something goes wrong there's a well-defined path to resolve it I jumped the gun and went out of order

Operator

here I know you're fine we didn't I want to talk about the major components of security so if someone said for the security sleeve within VAS what did include what are the sub bullets you you handled what which which revenue

Johan Gerber, Other

drivers were so we've got a couple of line items there and let me just take a quick step I know we talked about the two drivers of growth the other area that I think is important for us to recognize is our customers are around the globe are fighting an enemy that is extremely well resourced you know if you if you read the data out there and it's hard for me to verify if the data is actually 100% correct but even if it's not cybercrime and fraud is one of the largest industries out there if you read the documents they will say it's as big as the third largest economy in the world that's how well-funded the cyber world is the other piece you have is as a financial industry we are being attacked by criminals because that's with the money so somebody anybody with a financial gain wants to go after after the banks but then you're also a place where if any nation-state or anybody with some ideological problem wants to disrupt they want to disrupt the economy the flow of funds the flow of commerce so you're a target on both criminals as well as as folks with with with other intent so they the issue is real these folks don't respect borders it's global and so what we bring as a global company is that global view and that's why you will hear me talk about data our global connectivity and how we can then curate that data very specific to come back to the strategies of what you want to do with this portfolio and now let's talk about the components of security we've got a couple of them identity is a big chunk and the reason I will always go back to curate it fit for purpose we talked about I want to open up and launch a new portfolio I need to onboard those customers opening up accounts identity plays a really big role there and we also have a component of authentication where I've opened the account so I know you're real now you want to come back you want to use your mastercard credential how do I make sure you still are who you say you are so you've got account opening identity you've got authentication identity then so that's all within I did I said a bunch of other stuff in identity pass keys and biometrics and so forth as well the second one is our fraud and financial crimes which is a very large portfolio if you think about this hundred seventy five billion transactions across our network last year each one of those transactions get assessed for the risk of that being fraudulent we call that a fraud score and a product that we use there is a called decision intelligence we just launched decision intelligence pro which uses a bit of really interesting AI and we can talk about that a little bit later about the performance we also do financial crime for scams so in in the card world we do we help the the requester which is the which is the consumer or the merchant who wants to get paid and the and the issuer of the card so we help merchants and we help the banks who issue the card in the real-time payments world we help the sender and the receiver just to score this for scams and the and the likeness of this being a money laundering transaction so you've got fraud scores across these transactions multiple times that's on our fraud side we do a whole whole group of solutions in that one and then we have our cyber world which is just a massive growing And with agentic and with the technology evolution, that's becoming more prevalent than ever with the growing time that's in there. This is where the agentic piece comes in. This is where our recorded future acquisition comes in. So those are the big elements of the big areas of security solutions, the big buckets of

Operator

So, Devin, I'm not going to ask what you make in each, but what is the something that also comes up with investors is how do you guys make money on this? So is it per transaction for some of these services? I'm assuming also some of it is more like a SaaS for this particular feature on your portfolio. We'll charge you X for this service, but this will be, these other services could be per transaction. So is that a fair, I'm looking at Devin for those of you not in the room. Is that a fair question to ask, just kind of what the mix is between those two types of revenue, not the absolute revenue?

Johan Gerber, Other

Yeah, I can share with you a little bit. So there are a couple of, so diversification is the name of the game here, just like in the investment world. we have several of our services that are linked to the transaction so per transaction this value that you can measure and you you assess a fee for that we have some of our solutions which are by account so we monitor the risk or the behavior of an account and therefore you pay by X number of accounts or active accounts it's another way and then some of them are related to the transaction amount so what we call volume based pricing so and some of them are more you know static single year fees or quarter fees you know in subscription fees perhaps is a better way to do that so but most of them are event-based because the event basis where when the organic growth comes in that you benefit from that organic growth and the rise in that so those are the categories of how we of how we typically price would you say

Operator

historically if I look back ten years ago before vast was really a thing maybe like 12 years ago, whatever the numbers. These weren't necessarily differentiated revenue items. They were just part of what you do, right? Now your technology has gotten better. Your data has gotten better. Your ability to analyze has gotten much better. And now you can start charging for these things, because you are adding value to your end user, whether it's an issuer or a merchant. Is that the right way to think about it? All of this is just incremental.

Johan Gerber, Other

It's 100% right. And so if you look about how we quantify value, There's the value of the actual solution itself, which is am I detecting the right number of fraud? Am I within target of what I told the customer that you this is what you can expect? And then there is how does this play into my bigger Mastercard portfolio the one of the biggest KPIs for us in the effectiveness of our fraud solutions is can this actually help to approve more transactions? And which is sometimes counterintuitive, which you like you guys are catching the fraud guys you decline But you're measuring yourself around approval it is finding the right transactions to to decline Versus the wrong ones and that would be called false positives. It's a really really big deal So if you think about what we've done with our di pro we just launched a new di pro which is our transaction scoring solution 20% increase in fraud detection 80% reduction in false positives So if you think about the equation here The value of fraud let's say the total cost of fraud is I don't know 30 billion dollars the total amount of transactions gets approved are billions so if I can if I can increase that billions number with a very small percentage the financial value to my customer is huge and so our focus is really to help our customers make more money without grading leading risk run out of control and that's where a lot of our and this is where you know many folks think we compete with with a lot of our fraud providers out there we're actually working very closely with them because our ultimate goal is better business so it's a great segue

Operator

segue into my next question around competition. Our channel checks recently said on the vast portfolio, in Europe specifically, not so much in other places, the networks aren't the only game in town anymore. There's other people out there that are kind of doing things. Some issuers are trying to diversify a little bit. There's pros and cons to diversifying versus uniform, obviously, with consolidating services with a single vendor. Talk about your right to win out there on the competitive side. that no one can compete with your data, right? That's obviously the biggest. But who are you competing against, would you say? And are you seeing any kind of competition around the edges?

Johan Gerber, Other

Yeah, so on the payment side, of course, we compete very strongly with the other payment brands out But when it comes to our frauds and security solutions, we don't truly have a lot of direct competitors. The vast majority of the time, they're actually our partners. And it's not just on the issuing side of the equation, on the bank side where they issue the card, most of those banks will have their own internal fraud systems. Now, those fraud systems are designed to really have a deep understanding of that bank's portfolio behavior. What MasterCard brings is this broad network experience. We talked about the risks of being global, the criminals don't respect borders. We see fraud patterns happening in Japan that's on its way to the U.S. Things that are happening in the U.S., it's on its way to Brazil, way before their systems can see them. And so in that way, we typically augment rather than try to replace. And so you've got one plus one is three in this case and then our teams will go in and say let's help you with your fraud solution and we'll combine these scores in addition to that if you think about the data you know recorded future for us massive in terms of the data differentiation nobody else has this data that we have not even the cyberspace and not in the payment space we've got the world's largest in the man everyone what record recorded future is the world's largest independent threat in cyber threat intelligence company so they collect data around everything cyber threat related we use a vast number of sources so we basically understand everything the criminals are doing out there we're monitoring things like the dark web for instance if somebody hacks into one of the providers that you use your card and they steal your card and they offer it for sale there recorded feature will actually grab that card number we'll load it onto our network and when somebody tries to transact we're gonna to stop them so this is some of the things that they do so if you've got that data together with our our view of all the fraud that happens or the disputes that we see customers bring in nobody has the richness of that diversity of data and if you think about an agentic world we've got a lot of agents out there data is the one thing that truly differentiates in how you then leverage multiple types of AI models do then create value for your customers and if I think about that place you know we have not only the differentiated data but we have the distribution network in terms of our network our cards if you think about we've got 175 billion transactions different how many cars do we have 4 billion just just 3.8 billion cards let say for just under four we have you know well over 150 million merchants out there this is where the differentiation sits that's a distribution network then with this data and that's why we are so excited about the longevity of growth

Operator

opportunity for us in the space as you're talking i'm just thinking about all of the defense ability you have with your model right um the data being king right that's the new that's the new oil i guess to say uh do you would you ever give a third party access to your transaction data even in a generic form so i'm a third party would i would i ever be able to say to an issuer to a merchant we we have access to MasterCard's data because we have a partnership with them. Do you give that information out, or is that just contained within your walls?

Johan Gerber, Other

I'll tell you, in the security space, we are religious about that stuff. That doesn't happen. It is a true differentiator. It is a thing that... Now, we will often take external data and bring it into our systems to augment first. So we will buy, we'll go and partner with other companies. We will take the curated output of our data, and we'll sell that to people. And for instance, a big chunk is our partnerships. We talked about it a little bit in the competition side. We will send our score to a fraud provider that provides fraud scores to merchants and acquirers. And so they can use it, but the raw data, that's the key differentiator that we want to keep. The other thing that I think is important from a competition point of view, all of our frauds, I say all of them, the vast majority of them are what we call rail agnostic. So they will work across card rails, RTP rails, other types of rails. We talk stable coins, we'll probably get into that point as well, but your more digital rails. as well as brand agnostic. You know, for instance, CapOne is a good example. They use our Ethica solution across all of their networks, across all of their solutions. And so these are areas where we go in there to really help our customers. And that's where the competition is then. We can work with the other vendors that are there. If there's value, we'll do this. And sometimes we compete, but those are really the more minor areas of competition.

Operator

We touched on cybersecurity briefly. Did we touch everything you wanted to talk about there? Because I think, again, we could talk about that for hours.

Johan Gerber, Other

We can talk about that for hours. It'll probably come back into the fold. But I think the role for cybersecurity, of course, for our portfolios, maybe there's one thing I'll add is there's also now a big role that MasterCard can play in how we help governments. You know, knowing the threat intelligence that's out there, we're becoming a bigger and bigger partner to governments out there to help them understand what are the cyber threats that they need to look at from an economic point of view. So the expansion that cybersecurity brings for us is it looks at the entire digital ecosystem. We are partnering with all the big AI players out there, platforms out there. The insights that we bring on cybersecurity for things like crypto, we've got a product called CryptoSecure, which is looking at the counterparty risk. And it's not just the risk of are you doing your proper compliance, but how secure are you from a cyber point of view. We can assess cyber vulnerabilities. One of the things we are doing right now is, on the cyber side, is we're combining our risk recon. Risk recon is another company we acquired, which does cyber risk assessment and third-party risk assessment. So, basically, we will go and, from an outside in, we can tell you your cybersecurity posture is, you know, is a score at an E level or an A level, and you've got a certain score. That capability, together with the intelligence that Recorded Future brings, now allows me not only to understand my vulnerabilities, but how do I prioritize them? If you think about the frontier models that have just come out, Mythos being one of them, our ceasers are overwhelmed. All of a sudden, I went from managing X number of vulnerabilities to four, sometimes 10 times that. Where do I start? Because my resources are still the same. Where do I start to fix things and patch things up? You bring our solutions together, and recorded future can say, well, we're seeing these being exploited in other places of the world. So you need to prioritize them first. And so this is where we just become a real true partner. Now this is broader than our card business But this is the digital ecosystem within which we operate and that's where I think that expansion of the time and the right We now have to play in that area is helping us for growth as well. Awesome. Yeah, that's great

Operator

We have to talk about AI. Yep. Have you heard about AI? It's a new thing that's kind of just out there. Let's talk about AI not only what you're using for traditional transactions, but how you're using AI to fight AI driven fraud as well. I think there's two different topics there.

Johan Gerber, Other

I'll tell you, this is fascinating. If you just take a step back, the frontier models have demonstrated to us that in the past, if a cyber criminal wants to break into something, you know, they will do some reconnaissance, they will plan their attack, they'll pick their tools, they'll execute, they'll take the learnings, and there's a whole cycle. AI collapses all of those cycles into one continuous stream of events. And so if you think about that component then you would argue for a human to be in the loop or on the loop is actually a constraint it's no longer a help so getting into the more autonomous way of attacking or defending is become it's gonna become an imperative in my mind there's just no two ways about it and so one of the things that recorded futures just launched a couple of months ago is our autonomous threat hunting agents where we have one of the world's largest malware sandboxes so people from all across the world if they find malware they will send it into our sandbox we unpack the malware we understand the signatures and then we put those signatures into our agents and they go and they find if any of these signatures are present in your company now we've automated that with agents so that instead of us a cybersecurity person has to understand this right all the specific code to then go and hunt for these things all of that is automated and so this automation will continue to grow so it's a really big part of us in one of our products that Anna runs is called safety net safety net is designed to look for major breaches that maybe one of our customers gets attacked the bank gets breached and there's an ATM run you cannot have a human in the loop to see if there's an attack to say should I start declining this has to be automated so we have AI to identify the risk and then we've got AI to understand how do I remediate this I'll call the human but somebody needs to start taking action because otherwise There'll be a whole bunch of money, so it is a big focus for us and also a big area of growth This will continue we've only just started scratching the surface in terms of the problem and the solution set that's coming there

Operator

Now you mentioned and coming in from Microsoft obviously tons of experience there to bring deputy CISO

Johan Gerber, Other

Deep knowledge of cyber so we you can see there's a big area of growth just big investment in recorded future We're combining our cyber assets the four of those things of course We've got very strong leadership on our end is going to continue to drive that scams is going to grow But cyber is a big area for growth for us and the data again the data and then the platforms for which the data can be leveraged and Recorded future will have competitors But when you take a recorded future plus MasterCard's fraud data plus our attack data that we get from our own C So you create a differentiated data set that honestly nobody can compete with Can you sell this outside of the payments ecosystem? We actually we actively do so recorded future in fact I think the vast majority of their customers are actually non financial institutions right now So we sell to healthcare, manufacturing, automotive, investments, entertainment. So there's a whole bunch of categories out there.

Operator

Okay. So let's switch gears to your new role, which you're a month into on network and RTP. What's your initial reaction to what you've seen there in the capabilities and where things are going? We have to talk about UKPI that was just announced yesterday at Money 2020 in Europe. That's live now, supposedly, according to the press release, but press releases are always a little cagey. Talk about what your initial reactions are to what you guys have there and where you think the opportunities are for growth.

Johan Gerber, Other

So a big part of my new remit is thinking through how do we leverage our assets that we have. You know, we've acquired Vocalink. We've made some other acquisitions in the Nordics. We've got a number of assets in the real-time payments, bulk payment, disbursements category. And we also have our traditional MasterCard network, and we're just modernizing this into what we call our real-time stream Where we just enhance the we will start Clearing in real time so much faster. There's a whole bunch of new things that we're doing there We can help domestic markets do how do we bring these assets together to really solve for what the customers really want? Which is they want choice for their consumers central banks wants to have control over what they do? They want to have resiliency and then payment that actually payment options that works for how they want to drive their economy and that's that's in essence really where i'm spending most of my time right now on the white board figuring out how do we use these assets and it's just it's you know so we've got these switching platforms that we can put in and then we've got services so we're already loading out services on the rtp network for for vocal link where we do our consumer fraud risk the scams that i explained earlier how do we bring tokenization into the world of rtp you know so So there's a whole bunch of things where we can start thinking through. We have our switching networks, and we can build a value proposition, and the notion here will be very similar. How do we create opportunities for these central banks to actually build applications on top of the foundational stuff, which we know to do really, really well. With Bocasti UK PI, again, it's competition. There's a need in the market. The banks are stepping up. The regulators are pushing this. We own Vocalink. We operate Vocalink in that market. So for us, from this point... Okay, so Vocalink is the RTP switch network over there. So this for us is basically, you know, just equal there. So we'll see those transactions will run over the switch networks. But the competition is there, and we will go in and say, look, are there better ways for us to help them do this? Can we augment what they do? Can we do better? So we're not in the position of where we want to fight everything. We really want to see how do we help these. There's a reason why these regulators are driving this. How do we then come in and understand those reasons, bring our assets together, and say, let's help you grow on this? That'll really be the approach that we want to take.

Operator

Is there anything that the regulators have created which would give UKPI an advantage? Are they mandating anything for banks to automatically connect or do anything like that which gives them maybe a competitive advantage?

Johan Gerber, Other

I don't know yet. We've seen this happen in other markets. For instance, Brazil and other places, we've seen the regulators mandate these things. But even there, there are always opportunities for us to then go and work with those banks because those payments today don't have dispute resolutions. They don't have protection for consumers if something goes wrong on the transaction. When those transactions are going into the agentic world, they're going to face exactly the same challenges that we face with CARD. They're going to need solutions, they're going to need tech, they're going to need data to make that work. And so that's why we are staying very close to these things, and we are there to actually help. We want to really help economies grow. And that's why we don't necessarily see all of this as just bad competition, but actually as opportunities. Maybe we need to think harder about some of these things and how we accelerate even further but for us these are opportunities and white space to help

Operator

grow i think you um just kind of summarize why the all the management changes could be so positive right your background is a former cop that you said in security and now you're looking at this just bring a different perspective to a whole new world that you know about but now you're going to become an expert in again um i'd be remiss if i didn't ask you um with the bvnk acquisition still pending hopefully that closes soon for you guys you will have traditional rails you'll have the alternative rails with mastercard move and all the stuff that you're looking at rtp and then you're going to have a new toy to play with in bvnk with stablecoin infrastructure and rails how do you envision sometime sometime down the line i'm not going to give years down the line how do you picture all of these rails kind of steaming together and integrating together to to do

Johan Gerber, Other

something it feels like a bowl of spaghetti right if you think about all of this and that's that's actually where I think MasterCard is so good you know because what if you think about what we do today in running a global interoperable payments ecosystem that spans across real-time payments card payments bold payments P2P P2M that's that's where we where we feel comfortable we can we can help define the rules of the road we can help with the technology in place and the pipes and then layer on services on top of this that's where we're good so we see this as an opportunity for us if you think about bvnk we've done a lot already in the p2m space with regards to getting access to crypto how do i use my crypto to buy something how do i actually use my card credentials to get access to digital assets i can buy them so the p the consumer piece there's a number of solutions already there what bvnk will bring for us is this expansion beyond p2m you know how do we start looking at broader person to merchant person to motion sorry a person to merchant how do I instead of just using these things to pay what are the other types of opportunities out there and that's where this is going to be really exciting for us to see how this bolts and you can see a lot of use cases being developed in those areas that's where I think we're gonna spend that's why this is so exciting this brings another rail that has a strong growth and ultimately the interoperability how I use what we call world for multi-money is really the way we think about is you can start a transaction on a US dollar it goes through a stable coin through a different country and end up in all different other other currency this world of managing interoperability between how I pay how I want to get paid and then make sure that the messages flow and then the money actually moves themselves that's with the exciting parties and that's that's the complexity that we want to try and take out of the out of the equation so that businesses can build their business models on top of that that's why this this asset for us is It's going to be so important. And again, if you look at us versus the broader suite of competitors out there, even with local APMs, alternative payment mechanisms, we provide a global interoperability that none of them can. But this is where we can partner. We don't always have to fight about these things. If your credential in this country doesn't work and you go cross-border, there's a credential that works. And for the consumer, we can make these things seamless. That's ultimately where I think the value will be, and that's where a lot of our focus

Operator

I think the most exciting thing about what you guys are doing as a network is how you can start on one rail, it can seamlessly move to another, back to another, to facilitate faster, more conversion, faster transactions, easier settlement, lower cost for the merchant, more conversion. You're going to have an opportunity to play with all these different things.

Johan Gerber, Other

Exactly. And that is exciting. And, you know, we talked about a GNT commerce in the past, but there's a whole new suite potential transactions that will generate between agent to agent payments yeah you know how that's going to flow there's still a world out there that a lot of it is unknown but we've got the assets and we've got the security layers on top of it so that's why i think we are well positioned i feel and to not just compete but to to win in this space as well i mean that's a great way to sum

Operator

it up we uh actually finished right on time so thank you very thank you so much we could talk to you for a long time absolutely good luck in your new role and thanks for spending some time with us this morning.

Johan Gerber, Other

Thank you for it.