Fintech Insider Podcast by 11:FS
00:18:05 · David Barton-Grimley
[00:18:05] S0: And and and I suppose that counterfactual to, you know, innovation and and digital services, to use your example of a nursery or a property developer. These needs are so niche, and these organizations, in some cases, are so are so complex. Sometimes when I speak to commercial customers, they say, yes. It's, you know, I'd love to be using all of these systems, which you know what the spreadsheets that I'm using are actually just working. And the banking relationship that I have at the moment is is is is kinda fine. And you know what? Maybe I know that banking manager already, and I've known them for a very, very long time. So where does the... Where necessarily does the does the impetus for for for change come from? I mean, we know we know there is. So we've been talking a lot about things like cross border, cross currency with with, kind of, what you're doing at at AirWallax. But I'm I'm keen to talk a little bit about who is leading who, and is there any is there any subsector where you're seeing the biggest growth where, you know, whether we're thinking about Oak North or Air Wallachs where the bank or the fintech is leading the customer and saying, hey. These are all these wonderful things that you're not using versus the customer actually saying, you know what? I need this to your point, I suppose, Valentino. Pranav, we'll start start with you. Where... What types of clients are you hearing leading the conversation versus you having to go in and and and provide that that leadership?
00:19:20 · Pranav Sood
[00:19:20] S2: Well, we serve a lot of tech businesses, so we power many of the most innovative technology businesses in the world, so the likes of Brex or Rippling or Papaya Global and many, many others. Also, of the biggest marketplaces, so people like Sheehan and others are using our product around the world. And those those businesses are very, very effective at pushing forwards the, you know, the the road map of innovation that we are producing because they're also testing the boundaries of what can be done and and what can be delivered. I think when it comes to the SMEs, honestly, I I don't think there are that many SMEs who know the landscape well enough to dictate, you know, exactly what we should build for them. And even with very sophisticated businesses, so we serve companies in in ecommerce or online travel or or even many SaaS businesses, I generally find that they're surprised at what is now possible given the layers of technology that have been built over the last, you know, five, ten ten years. So, you know, to give a couple of concrete examples, Val mentioned some of the challenges that people have with multi entity setups and the difficulties that come with, firstly, just consolidating the money that you have across different entities. And then secondly, doing things as as simple as making bill payments and figuring out which entity a bill payment should come from and who needs to approve it based on the rules and authorizations that you have in that company. And people are often surprised to know that you can actually do that via something like Airwallex versus having to have a manual process where you're sending emails around the houses to go and get it done. And these are even people who are operating what, by any standard, you define as a very innovative company. So I think, you know, like Val mentioned and and as Sarah alluded to as well, of course, as as fintechs, as product led organizations, you always want to be informed by what the customer is is telling you, and there are very good and very innovative ideas coming out. But I I honestly think that the level of knowledge about what's possible is still relatively low, and so we have a a very significant job to to educate people.
00:21:19 · Pranav Sood, David Barton-Grimley
And I think to David, your point as well, build the credibility in what we're building such that they trust us enough to move away from whatever solution they've been working with in the past. [00:21:30] S0: And Valentina, from your perspective, I mean, what is the typical type of commercial customer which is pushing the agenda, would you say?
00:21:37 · Valentina Kristensen
[00:21:37] S4: So I think, you know, it's a bit like, you know, if you think about the creation of the iPhone, you know, I think, obviously, if you can conceive it, you can achieve it, right? And there's obviously, you know, examples there, I'm sure, where customers said, it would be great to have a mobile phone that could do X, and, you know, or that I could have my mobile phone and my iPad Nano in one thing. And then obviously Apple went and created it. And there's been many other smartphones, obviously. So I think sometimes, it is the banks or the fintechs that are sort of leading the charge. You saw this in retail as well, right? I mean, there were so many features that the likes of Monzo and Starling created that I don't necessarily know if the customer sort of said, it'd be great to have something like gambling blocker, or it'd be great to have something like the ability to freeze my card in case I think I've lost it and then I find it, then I haven't gone and called the bank and had everything closed down and I have to get a new card and so on. So I'm sure that there's sort of, it's a combination of both. In terms of what we're seeing specifically, it's really a mix. I mean, as I say, those are all examples that we've heard from customers of pain points. So whether it's a nursery business, whether it's a restaurant or a hotel, I mean, if you're a nursery business, again, the ability to manage who is able to spend on the credit card. You might need certain things, whether it's the food shopping for the week for the kids meals, whether it's deliveries of things like toilet paper and wet wipes and things like that in the nursery. Whereas if you're in a hotel business, there's probably someone with a very specific role, you know, who's managing those kinds of things. You know, and so I think those are just, again, different pain points. And in some cases, it's hearing from the customer and then saying, okay, that's something that might be a useful feature for those specific customers. Whereas obviously, if you're not a cash flow business, then the ability to do cash flow forecasting isn't necessarily going to be something that you'll care about or ever use. And therefore, saying, you can also do cash flow forecasting is sort of a pointless thing to present to the customer. Right? Because they're never going to use it.
00:23:46 · David Barton-Grimley
[00:23:46] S0: Indeed. I mean, there are some areas we can we can innovate, where sometimes working in fintech, we think a customer might interested or might need it, whereas actually it turns out that an existing process works works very well. And I'm I'm curious for us to to talk about the the innovation agenda in general within within commercial banking. And, Sarah, I'm gonna come to you to you first on this reflecting on the wider fintech industry. You know, there's been a a huge drive for innovation as as we've all seen, but there's definitely been some roadblocks and blockers in terms of advancing customer adoption beyond a a certain point. Do you think we are taking innovation for granted in in fintech in general and in commercial banking?
00:24:27 · Sarah Kocianski
[00:24:27] S3: So I think one of the things that has already, again, been alluded to on on this podcast that we underestimate is people's personal resources. Do I have the do I have the time? Do these people have the time to try and understand what this is and how it works and what might be better? If you're particularly, you know, it's as often said, if you're a small business or if you're self employed, I I need to be making money every minute I can be making money. So four hours spent working out, which is the best accountant for me or which is the best, you know, bank account for me or which is the best international payments for me is is is almost wasted time. And if I have the physical time, I have the mental capacity to actually sit down and think, okay. I've got to do all this research myself. And I do think that that extends all the way through. I think, you know, if your job is within the treasury team, your job is CFO, there isn't that much time, very rarely, is allocated in your time to actually sit down and work out what the problems are that aren't currently being solved. To the point you made and, you know, the point about spreadsheets, spreadsheets solve a problem. Do I have time to work out a different way of solving this problem? No, because right now I'm trying to keep my business going. There's a lot of businesses right now that are going, I just need to keep going. I just need to work out how to keep going. I think there's potentially an opportunity there in certain areas. We've mentioned hospitality and retail. How do I save money? How do I work more efficiently? So, if you and that's to go back to Davao's point about jobs to be done. If you can present innovation as a solution to doing things more efficiently and you can prove it will be more efficient or it will save money, then that is an opening. I think unfortunately, lot of innovation is presented in a way that everybody looks at it and goes, that's too big a job. I don't have time or energy to do that. I don't have a dedicated team within whatever my organization is to think about innovating payroll. I just need to make sure people get paid or I just need to make sure we have enough money to pay people. So I think, again, that kind of like carries through as to whatever size of the business is.