In this installment of the Challengers series, Rodolfo Passeri spoke with Panagiotis Kriaris, the Head of Business Development at Unzer, an innovative and modular platform for international payment transactions. Panagiotis and Rodolfo touched various topics, including the key trends in FinTech, Open Banking, payments, and much more!
Panagiotis, we know you have worn many hats through your career so far; it would be great if you could briefly summarize your background and what brought you to Unzer?
Indeed, I have been lucky throughout my career to wear many hats and work across geographies. After a 3-year stint in research focusing on e-commerce and in the startup world, I found myself in banking and have spent the rest of my career ever since in different roles spanning retail and commercial banking, payments, and fintech.
Being in the borderline between business and technology has been a common denominator across all my roles as well as the international element. I have worked across most countries in Europe and have always found working with people of diverse backgrounds and nationalities one of the most rewarding experiences.
The reason that has brought me to Unzer is the enormous disruption potential and the opportunity to create the next payment champion in Europe. Unzer has undergone a significant growth phase lately, with latest acquisitions such as Lavego, a technical network provider, and Clearhaus, a danish Acquirer – and can offer a complete payments value chain in the DACH region as a fully integrated payment services provider. As a result, Unzer is one of the most exciting FinTechs to watch at the moment.
Tell us where and why your interest in FinTech first began? What makes it so compelling to you?
I believe that FinTech is part of the evolution of financial services as a whole, and since I have spent most of my career in the industry, I cannot see how I could have missed it.
The FinTech revolution of the past decade or so has been the result of the increasing role of technology in financial services, which, in turn, has met a huge demand for doing things in a different way and primarily in a way that puts customers first and solves problems. I know that customer centricity might sound like an old-fashioned buzzword, but I am confident that it truly sits at the core of what FinTech is about: simplicity meeting customer needs. This is exactly the reason why it is compelling: because it has allowed addressing existing problems through different lenses and providing innovative solutions as a credible answer. Solutions that many times have seemed unrealistic or far-fetched at the beginning, only to prove the next big thing.
What segments are you most focused on in FinTech, and why?
Payments are at the core of my current role and have been my focus over the past years, but I'd like to take a different approach here. Although there is always a core business or a starting point, I don't believe that there is such a thing as a segment focus, especially a hard-coded one.
Instead, I am always looking to find adjacencies and overlapping points between what I can offer today and what might be relevant as a next step, which goes back to meeting customer needs in a holistic, 360 way. If you look at the most successful FinTechs of today, this is what they do.
To not leave your question partially answered, these are some topics that I find interesting: alternative financing, open banking, embedded finance, alternative payments, marketplaces, platform banking, CBDCs, and DeFi. At first glance, some of them might seem wide apart from others, but I firmly believe there are overlapping solid sections.
Could you explain to us some key trends you see in the market, anyone that stands out in particular, and why?
Several trends are standing out:
1) The transition of financial services from a vertical integration setup to a platform-based one. Today, half of the world's top financial institutions follow a platform model; in 2010, no platform player was on the list.
2) The rise of alternative payments, including virtual mobile wallets, BNPL schemes, P2P and A2A money transfers, and cash payment schemes, among others. Overall, there is an increasingly diverse number of payment methods beyond cards and cash, which is here to stay.
3) The quest for the next wave of payment infrastructure will likely consist of a mix of new and old capabilities in a multi-rail setup where cards will co-exist with real-time, A2A payments facilitated by open banking technology.
4) The re-invention of small-business financial services based on broader, services-oriented offerings addressing topics such as financial workflows, smart analytics, and actionable advice.
5) The rise of embedded finance across payments, lending, and beyond.
6) The concept of digitalizing ownership rights, in a process known as “tokenization” could reshape the investing landscape. Imagine an integrated financial markets ecosystem, where every real-world asset is also represented by a digital unit or token.
What are your thoughts on Open Banking? Has it been successful? How do you think it can be, if not?
Open Banking brings a mentality change from a traditional, vertically integrated, and static setup to a dynamic environment, where APIs offer ubiquitous and straightforward connectivity.
Data and APIs are the new building blocks of this open approach enabling customer-rather than product-driven innovation, found at the intersection of multiple offerings, often going beyond banking.
Given the different global approaches, market-led but fragmented in the US, regulation in the EU (PSD2), and a mix between the two in Asia, we cannot generalize the performance or impact of open banking so far. Even Europe and the UK, which have pioneered the approach, are still at an early phase, despite significant progress.
Going forward I see two main trends:
1) As the APIsation of financial services progresses and cloud becomes mainstream, open banking will play a critical role in the next stage of the FinTech revolution, which will be built around data and hyper-personalization.
2) Open Banking transitioning to Open Finance and impacting the positioning of incumbents and challengers along the value chain.
For banks, open banking is their best chance to leverage the potential of the API economy through new business models such as platform banking or embedded finance.
We see you have worked in many large "rigid" banks; what can they learn from newer and leaner startups?
The most important lesson for large "rigid" banks is realizing that the vertical, one-size-fits-all, product-focused model is a thing of the past.
Banks are not in a position to have own, in-house offerings for all their customer segments and customers don’t care who has built the product per se but if it is meeting their needs. Hence, success depends on their ability to adapt by clearly articulating a strategy that focuses on their core strengths and builds upon cultivating trusted relationships with key customer segments. Partnerships with FinTechs and other parties have a significant role, whereas in many cases, outperforming competition will mean adding value beyond banking.
The second learning has to do with the use of technology. Modern clients are living in a digital universe and their expectations are shaped by their experiences in a plethora of offerings that go beyond banking. FinTechs and BigTechs have done a good job in using technology to eliminate customer paint points and to improve the customer experience and there is an increasing expectation that other providers, including banks, reach this level as well. Going forward banks will not only be measured against their peers but primarily against the likes of Amazon, Apple or Uber.
How do you see the payments industry evolving over the next few years? Will crypto play a role in its evolution as transactions costs get lower and lower?
Payments have become a technology-first business with fast-paced dynamics that are very difficult for non-core and non-agile organizations to follow. As a result, big incumbents like Visa or Mastercard, together with newly-established payment FinTechs, will continue to control the game, which will undoubtedly experience the next wave of consolidation driven by the quest for size and economies of scale.
For banks, a come-back in the sector is unrealistic. The most ambitious ones will try to stay in the game by leveraging strategic partners, like the joint venture that Deutsche Bank has announced with Fiserv.
The huge e-commerce and digitization shift has resulted in merchant relationships gaining focus, which, in turn, is shifting the name of the game from mere acquiring or processing to end-to-end holistic merchant solutions and to added-value services.
When it comes to crypto, its growing popularity has forced key players globally to take a stance with investment in cryptocurrencies set to increase as more institutionals, VCs and private equity funds join the game. However, challenges such as volatility need to be addressed before crypto can go mainstream.
It is an irony that although cryptocurrencies evangelize decentralization, much of the crypto use we have witnessed so far has been in centralized platforms. With DeFi quickly becoming one of the most popular crypto use cases, this might be soon about to change.
What podcasts are currently in your playlist, and any interesting books/blogs are you reading?
I am a big fan of podcasts, so more than happy to provide a few suggestions:
Regarding Open Banking, I can recommend the Mr. Open Banking Podcast, hosted by Eyal Sivan. In June, I also had the privilege of being hosted in the podcast and discussed open banking in episode 5.
For our German-speaking audience, ReTink Open Banking by Cyrosch Kalatehis is always spot on in identifying and discussing FinTech topics and trends. The CEO of Unzer, Robert Bueninck has recently had an interesting discussion (in English), which can be found here.
In terms of blogs, I find Chris Skinner's blog always insightful. Regarding books, allow me to recommend something non-FinTech related: "A Brief History of Humankind" from Yuval Noah Harari.
Finally, for those looking for a 360 view on FinTech developments, Jason Mikula's Fintech Business Weekly is one of the best proposals out there.
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