Please tell us a bit about your background and how you ended up in Fintech?
My road to the Fintech industry began a long time ago, ever since I obtained my degrees in IT and Economics and started working in the information technology, business administration, and marketing fields. Going through e-commerce and many other aspects related to online sales, I’ve switched to credit card processing. So, I’ve been involved in finance and technology from the very beginning of my career. These were the areas I’ve been most interested in and was natural for me to pursue this track.
What made you choose a career in Fintech out of all the other sub-verticals in technology or finance?
Fintech is about blending technologies with finance – something I’ve always been passionate about. We must understand that the world is changing faster than ever, and innovatively combining technology with finance allows us to create solutions that haven’t been considered before and solve problems in new ways, with creative instruments that weren’t available to us before. Just look at how everything changed once smartphones took a big load of our daily tasks on themselves. Fintech does the same thing. It builds the future, and I was interested in studying and leveraging the possibilities of tomorrow, rather than getting stuck in the present.
What made you start Salt Edge, and what differentiates the business?
The very first problem that we were focused on solving when starting Salt Edge referred to accessing data that both its owner and involved business allowed us access to, in order to make the best out of it for all relevant parties. People and businesses open up bank accounts every day; the informational load grows from minute to minute. One cannot have expected that one person or one company would be able to deal with all of it the old way. To access and analyse this information, the process has to be automatised, in a unified standard manner, with all security measures complied with.
We focused on the European market, as nothing like this existed in Europe when we started. Salt Edge became a pioneer in many countries, including Italy and Greece, and I’m happy to say that we were the first ones to solve the data-related issues in these parts of the world. Salt Edge is different because it creates and makes available Open Banking solutions not only within a country but also at regional and even global levels.
We provide 1 service, with 1 security standard, framed in 1 legal structure – this is highly competitive, and, most importantly, very convenient for our customers.
How have you seen the FinTech market develop over the past 2-5 years? What are the key learnings you've gotten out of it?
That’s a very good question. Generally speaking, the Fintech market has received major investments from various sources throughout the last years. However, despite the general trend, I’ve noticed that financial institutions are moving slowly and occasionally seem to be less eager in quickly solving various situations. On the other hand, Fintechs are more agile, adopting new technologies faster, validating, and providing feedback in optimum time. Correspondingly, financial institutions need Fintechs for covering the aspects FI’s are not the best at.
Fintechs have become more and more regulated in many countries, especially with the adoption of Open Banking in the UK, PSD2 in Europe, and CDR in Australia. What used to be incomprehensible and with unclear terms of access has become understandable and predictable. Fintechs have gained certain rights and permissions, which, of course, impose responsibilities regarding security, insurance, and other important aspects related to compliance and AML. While some may say that things have become quite complicated, I believe that we are heading to more structured, transparent, and clear zones of responsibility and liability.
As for lessons learnt, I believe that one of the most important refers to partnerships. No Fintech could solve all the occurring issues by itself. The uncovered aspects remain to be resolved through partnerships with financial institutions, tech companies, media companies, online businesses, credit bureaus, lenders, PSPs, and many others. There are too many use cases in the world, with countless requirements and possibilities, for one Fintech to successfully deal with all of them alone. Therefore, a well, correctly established, and predictable partnership helps sought things out.
How would you say the evolution of the Open Banking market is occurring?
Open Banking hasn’t exactly evolved the way we thought it would at first. On one side, everybody had certain expectations and on the other side – we are dealing with what we knew would happen from the very beginning: banks wanting to be the first to get access to data from other banks and the last to open up their own data. Unfortunately, all banks thought alike and, as a result, we found ourselves with APIs that didn’t correspond to the existing standards, which were not stable, or improperly technically written. There wasn’t enough support, nor communication between the participants. Sandboxes weren’t functioning properly, so going live with a green, problem-free light, was more than challenging. Some of these issues got solved along the way, others persist, like 4 months of waiting for a bank to solve an issue related to SEPA payments sent from the UK to Europe (true story). We’ve witnessed institutions interpret the law in ways that were obviously different from what the regulator meant or what Fintechs and end-users expected.
At the end of the day, the one question that truly counts is why do we need Open Banking? We need it to solve end-users' problems. Not banks’ problems. Not financial institutions’ problems. End-users’ problems. They must be in charge of their data, their finances, they must be able to keep track of them, understand where they are ineffectively used, and decide what to do with them. This information belongs to them and they should access it freely. This should be the main focus of Open Banking evolution.
What are the biggest opportunities in Open Banking and FinTech broadly?
There are plenty of opportunities to explore, and one of the most promising is combining industries among them: lending with payments, insurance with payments and account information.
We should strive to make payments between businesses and customers safer, more cost-efficient, and faster, and so on. Open Banking has managed to cover the security part with SCA and dynamic linking, which minimised and even excluded fraud. Now it’s time for the other aspects, like cost-efficiency. Everybody knows how banks’ transaction fees affect businesses. Just imagine if Fintechs manage to decrease these costs by 10 times. Merchants would then get access to huge amounts of resources left free for whatever use, either it is reinvestment or profit increase. Let’s face it – this is critically important, especially in this pandemic.
What sectors of FinTech are you most excited for in 2021 and beyond?
First of all, I’d mention the lending, B2B and retail payments’ sectors, especially the latter – whereas payments initiated from payer’s accounts can replace card payments. Remote channel payments also stand out, as credit card details are no longer transmitted to merchants. Mortgage payments, financial auditing, bookkeeping, and realistic credit assessments are also areas worthy of further exploring. Surely, some options are more appealing than others, while others are more niched. There are millions of possibilities out there and our mission at Salt Edge is to provide a universal platform that will take the burden off various types of businesses and allow us to create dozens of use cases based on our technology.
Another great thing is that people will avoid limitations. End-users don’t need to think about bank’s setbacks, payment schemes, and other complications. Once a client chooses a bank, our mission begins – we know everything about it, how it works, what we can do to improve our client’s experience. And here is where collaboration with banks becomes more important than ever: banks' clients are Fintechs’ clients and vice versa. So, I’m positive that the collaborations between financial institutions and Fintechs will become more open and customer-oriented.
Any parting words of advice for any aspiring Fintech entrepreneur out there?
• First of all, get a very good idea of what you want to do. The world is complicated and controversial, you should really understand what you want to accomplish.
• Get a good team. It all depends on the team. No matter how good your idea is if you have no team, your idea has no future.
•Get support. You need support partners, from your team, from your clients, from your investors. Listen to what your clients have to say, understand their pain points and desires, and try to solve it.
• If you found a working business, technological or financial model – develop it continuously. If things don’t work out, don’t give up. Try another model, get out of your comfort zone and remember: new problems bring new opportunities.
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Have a great week and stay safe!
The Banq team