This week we had the chance to get some insight into the staffing challenges that FinTechs are facing as they scale from Caren Schwannauer of Mason Alexander FinTech.
Can you tell us a bit about yourself, and what got you to the position you currently are in?
I’m working in Business Development for MA Fintech. I feel MA Fintech is a passionate talent solutions business, focused on adding value to disruptive Fintechs and Startups. I have a background in Psychology and prior to my role with MA Fintech, I was working for a Start-up that developed a solution for AML Compliance. During my time within that RegTech Start-up I realised how difficult it was to find the right people as a Start-up. Especially for a young company, a hire is crucial and can ‘make or break’ your success.
It happens all the time that Fintechs hire talents and then shortly after find out that they e.g. don’t fit into a Start-up environment or don’t have the right skillset. So, I was totally up for joining Mason Alexander when asked me to build up MA Fintech and help Fintechs find the right people and connect them to relevant people within their area.
What gets you excited about Fintech? What is it that made you choose to specialize here rather than any other tech sub vertical?
Compared to other Tech sub verticals – finance is touching all aspects of our lives. Basically everything we’re doing is somehow linked to a financial transaction. This is what makes it so interesting to work in this field.
Using advanced technology to innovate the way we integrate financial topics into our daily lives, has not only the ability to change our personal life, but also our professional life. Banks and FinServ providers sometimes still rely on the same processes they used 50 years ago, while technology already plays a key role in other areas such as communication – which is a massive opportunity for new players.
How have you seen the FinTech market evolve over the last 2-3 years? And how has the translated into the hiring market?
Over the past years we have seen the Fintechs becoming more niche. Looking at Neobanks, for example Starling just wanted to build a bank that is delivering a better experience (UX) and service for clients whereas now we see niche players that tackle areas like environmental friendly banking, banking for kids, banking for different religions etc. Now, this doesn’t translate 1:1 into hiring. We just see a common evolution of a market from general players that open the market to niche players that try to realise the full market potential and eventually this will lead to few core players that cover general as well as niche markets with a wider product range.
Looking at hiring, you can usually tell from the stage the company is at. At a very pre-seed/seed you are looking to hire Software Engineers to get up and running, then they focus on Sales and Business Development to get key clients, followed by Marketing to increase their visibility and then they hire for Compliance because they need to make sure that you comply with your regulatory environment. Not saying that this is a path I recommend to follow – you should hire Compliance staff way earlier and it will make your life easier to get Compliance and Regulation right from the first day on, but unfortunately the common pattern for Fintechs is to hire Compliance staff when you already have your national watchdog knocking on the door. As the majority of Fintechs are around now for a while – this is the first year where I see Fintechs on a large scale putting a big focus on hiring competent Compliance staff.
Are there specific skills and attributes, those looking for a career in Fintech need to have? Are there certain skills FinTech look for more than any other tech vertical?
From a very general point of view, Fintechs need people that understand Financial Services, but also have a Start-up mindset. This can get more specific depending on the Fintech area a company is working in e.g. Wealthtech Fintechs might prefer someone who brings experience in Wealth Management.
First and foremost Fintechs want to deliver better banking and financial services and therefore need people that know the status quo of certain services and Painpoints that need to be solved.
What are your view on Open Banking and broadly Open Finance in the future? What are key headwinds and tailwinds in your opinion?
Open Banking/Open Finance will definitely shape the future of how we use financial services. The use cases for Open Banking (PSD2) are massive and right now we’re just touching very basic connection of current accounts whereas looking at it from a bigger picture we can connect it either with different areas such as insurance or telecommunications or also from a business context oversee business finances instead of induvial finances.
Obviously right now integration and data accessibility is still difficult because of the old infrastructure banks rely on. It will take a bit of time and a lot of communication to get that sorted but once it gets traction on a larger scale I expect an exponential growth of users for open banking (API) services. Another massive headwind could be banks realising the potential of Open Banking and deciding to use the data they have for their advantage. For example only sharing selected data with other players or putting a stronger focus on cross-selling internally. Especially the Data sharing part needs a regulation that makes sure that data has to be shared with other players because otherwise there is no realistic chance for new player to establish themselves.
How do you think a bank or Neobank differentiates itself in todays competitive consumer finance scene?
I think the “differentiators” we currently see when we look at Neobanks are rather small. As I said, there are niche players right now that are building great services for an “underbanked ” group. That being said some of there are players that solely provide a “nicer interface” without any substantial better service, products or features than an incumbent bank would provide.
If you look at it long term, Neobanks need to figure out how they want to become profitable and which one of their services is actually something people want to buy. On a B2C side there are three models that can work. One is to focus on your community – which is willing to pay for a service that will maybe hallway satisfy their needs but the community supports your companies mission and is therefore willing to pay more.
Second is to focus on a subscription-based model which means that you deliver services that a group that has an excessive usage of a certain type e.g. people that are living abroad needing to transfer money (PayTech) to their family home so you provide them low costs to wire money.
Third is to create an environment around your product which integrates so well into someone’s life that they will use your product several times a day. Same approach Tinkoff Bank took with creating their ‘Super-app’ – integrating a variety of third party services that offer discounts to users in exchange for a user fee can be a way to become profitable.
What are your top predictions for FinTech for 2021, and long term more broadly? Any wild Space-X-esque ideas?
For 2021 first of all I think we’ll see (already saw) a good bit of rumbling on the trading market with a higher usage of trading apps. In terms of innovation there will be way more big tech players tapping into the FS/Fintech world and we will see more Embedded Finance solutions and an uptake in Open banking usage.
My Spac-X-esque idea? In 10 years there won’t be any financial players we recognize as such – we just have an account on our name linked to service providers that suit our needs and interests.
What is your advice for any aspiring individual looking to enter the FinTech world?
Build a strong network! Take usage of LinkedIn to connect with people and take usage of Twitter to follow Influencers. Being up to date and knowing what the industry is talking about is key as the market is evolving very fast.
For more Open Banking related resources and use cases, please go to the Open Banking Tracker
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The Banq team