The journey for any young FinTech company is never smooth, with endless bumps and divots, pivots to new markets and products and changes in personnel.
Three burgeoning Scottish firms were pleased to share their experiences in founding and growing a FinTech. Andy Smith is CTO at Nucleus Financial, an advisor built wrap platform that supports financial advisors to help their customers, by giving them access to their investments in one secure online platform. James Varga is the Founder and CEO of The ID Co. A Fintech working with (open) bank data to help financial institutions solve problems around compliance, risk and affordability; and Oliver Blower is the CEO of VoxSmart, a market leading mobile surveillance company headquartered in London with offices in Singapore and New York.
Andy Smith from Nucleus Financial
Nucleus want to be seen as a positive force in the market, and to that end they have been totally transparent in their pricing structure which helped them to gain credibility and traction in the market. This also meant that when other providers began to highlight their costs, Nucleus didn’t have to because they had been transparent.
Lesson #2: Understand the difference between building a business and building a product
Like many FinTech’s Nucleus set out with a product to sell. It was only later that they discovered that it was just as important to build a company as well as a product. For Nucleus, this meant bringing in seasoned professionals who could focus on compliance, regulation and financial capability. This has helped to build longevity into Nucleus’ business model.
Lesson #3: Keep disrupting yourself
Andrew was very clear that the sense of disrupting yourself was what motivated him and his team towards better results. To start with he found much of work was around building controls, then automation became important, and increasingly now, AI has been key to progress. Nucleus spend a lot of their time thinking about data and analytics and integrating AI which requires a very specific skillset.
James Varga from The ID Co.
Lesson #1: Only one thing motivates consumers – convenience
The ID Co. Has seen other vendors and competitors offer products and services that could be cheaper, but what ultimately drives consumer action is convenience. James stated that consumers will pay a little more for a product or service if it is more convenient. He has seen examples where 70% or 80% of people are willing to share their data in some cases. Given that 10% of the population won’t share any information, that menas essentially the whole market has been captured. He gave the example of a customer who could make same day mortgage decisions, and loans that could be personlised for the applicant.
Lesson #2: It’s all about context – don’t lose sight of the consumer
James stressed that it’s important to find drivers both for the business and the customer. While it’s not always easy for a B2B company to keep focus on the customer, doing so will benefit both the customer and the business.
Lesson #3: Financial services is a hugely risk averse industry
One of the financial services is risk averse as so many people within it are personally liable, such as AML officers. These people are not willing to bet their futures on a tech startup. Pushing through the barrier and selling to the big banks is thus a massive challenge. Only recently have we seen a change, and that’s down to the regulators, and James stressed that in the UK we are massively fortunate to have the FCA. In the last six months we have seen banks begin to make use of bank data and a new acceptance to consider something new, which is opening the door to having a conversation with them.
Oliver Blower –from VoxSmart
Hire somebody who knows how to land stuff and can get other stuff up in the air as quickly as possible.