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Alistair Cotton and Daniel Cronin, co-founders of Integrated Finance, spoke to Rudolf Falat, founder of the Voice of FinTech podcast, about helping FinTechs focus on their primary missions and taking the back-end challenges off their hands.
Aiming to inspire entrepreneurs around the world to launch their new ventures. Connect FinTech enthusiasts with start-ups, incubators, accelerators, investors and incumbents.
[00:00:00] Voice of FinTech.
Welcome to Voice of FinTech at podcast mapping out the Swiss and global FinTech scene connecting FinTech enthusiasts with startups, incubators, accelerators, business engines, and VCs, and incumbent interested in partnerships. Voice of FinTech will help you navigate the FinTech ecosystem here. You can listen to the startup, found the stories.
What investors and incumbents are looking for when dealing with startups and find out more about resources provided by incubators and accelerators. My name is Rudi Falat and I'll be hosting this podcast.
Hello and welcome to Voice of FinTech. Today we're going to talk to Daniel and Alistair, and we're going to talk. [00:01:00] about Integrating finance because their company is integrated finance and they're helping FinTech businesses to get off the ground. So they focus on what's really important for FinTech businesses, and that is client experience or user experience.
And they can leave the infrastructure build-out, which is behind the scenes to Alistair and Daniel. So how do they do it? What's unique about their solution? Let's find out. How are you today guys? Doing great. Great to be speaking with you. Brilliant. So I always ask, what's your journey? How did you get to where you are today?
But I think in your case, let's also clarify, how did you two meet and then decided to go and do some business together? Sure for the listeners at home to tell the difference between me and Al. I'm the one with the slightly annoying, nasally, half Irish accent and Alistair isn't. How did me and Alistair meet 10, 12 years ago?
We, uh, through she [00:02:00] happen, since we're working at the same company, my job was to make loads of cold, cold, uh, and get told go away all day. And if by some lucky instance, someone didn't tell me to go away and I turned them into a customer, Alice's job was to generate revenue and add value to that customer.
From there, we saw a gap in the market in banking and we launched a, a FinTech, which now you'd call banking as a service called Settle Go. We built that business up, did a lot of integrations into some of the main players in BAS today to power that FinTech. And when we exited, we decided we'd saw another gap in the market.
And for those of you who are wondering what that gap in the market was, it was integrated finance. I see. So then and Al, so then you say you are Irish, you have an Irish accent, and Al, have you lost it or are you not from Ireland? That's a good question. I'm from the center of England Midlands, which means that people from the north of England think I'm Southern.
[00:03:00] People from the south of England think I am Northern and everyone else outside of England can't place where my accent is. Which explains your question. Basically the Midlands, I'm proud to be. All right. Understood. So what's the problem that you're solving? You started to talk about the gap in the market and let's also.
Try to be realistic because if you talk to VC investors, they might say, That's a nice problem that you're solving, but is it worth solving? Is it worth our time? Is it worth the money? So let's talk about the problem and the gap in the market that you discovered. The problem that we are trying to solve within integrated finance was the major problem that we experienced when we were building and scaling settle go, which was, as Dan described in the back end of the product.
We were connecting to lots of different banks and banking as service providers, and each one of them had a very different method of connecting to it, whether that be bespoke APIs or legacy connectivity [00:04:00] or different workflows about how you send the information to the bank. Um, and what that meant was as we scaled the number of things that we connected to a lot or the vast majority of our engineering, Resource got consumed by building and crucially maintaining those integrations to those banks, and it was something really that the customer didn't care about.
It just needed to work, but on our side, It was consuming a lot of resources and we looked when we were working in settle go for some business that could be a common infrastructure provider, provide connectivity to all of these institutions, standardize it and allow us to consume it once and once only.
That business did not exist, so we wanted to build it ourselves. I see a lot of people refer to this when, if you are, if you have a banking background as plumbing or. Maybe they should talk about cables because it's not really plumbing, but it's cables. So [00:05:00] how do you measure the success of an infrastructure provider like yourselves?
What makes you. Stand out versus competition. What makes you successful? Is it that you can put all these pipes into one or they don't break down, or you implement it all quickly? Oh yeah. More cheaply than others. What are the metrics? How do you measure success in your case? I'll quickly answer this from my perspective and then let done jump in, but I think one of the aims of our business is really to turn what can be or what is quite a high fixed cost.
I. Most fintechs or transactional banking fintechs build their own backend, which requires a team of engineers in quite a lot, a long time of work to build the product and then scale it as you're going forward. Turn that fixed cost. Into a pay-as-you-grow subscription platform. The reason that we think that we can do that is because most of the infrastructure between transactional banking fintechs is common.
It's just not platformed yet, [00:06:00] and that is what we're trying to do. So one, we want to standardize the way that we, you can talk to on the providers, which should reduce the cost of building FinTech and. The long term aim of our business is to allow more fintechs to be built on a yearly basis than exists now.
Yeah, and ju just to briefly add to that, you asked what are the metrics, I suppose, from a metric standpoint? Who's asking the question? Is it VC trying to measure what a good point in the market is? Is it, is it sales? It, there's a bunch of different metrics, but really if we're sticking to our vision, What we're trying to accelerate the rate of innovation in financial technology.
The key metric for integrated finance is success over the next five years is to what degree do we increase the number of effects entering the market that are solving a specific pain. We're not talking about can we get 10 more Revolut live. All that's gonna do is [00:07:00] disincentivize users to put all of their traffic in one place.
We really want to see. The costs come down to start a FinTech so that people can serve smaller subsets of, uh, of communities. We wanna see, uh, banks that solve migration issues, banks that solve employment in specific industry problems, banks that solve for businesses in eCommerce. That's really the metric that is driving us forward.
Okay. Understood. So you don't only want to make money, you want to make a better road, Right. In a sense and, uh, help financial inclusion. Absolutely. I think to, to that end, we do track how much revenue our customers are making as well, and that is the top level aim for us to see those businesses making money whilst serving communi.
Right. But what about from client's perspective? So let's say you have an idea for a FinTech that [00:08:00] would aim to help all kinds of financial inequalities, and then you need to choose with whom you're going to partner when you want to build out the financial infrastructure. So what will you tell them saying apart from that you are the right cultural match.
That you have done this with other clients and, uh, look at the performance, do it with us, not with other people. I think the key differentiator with the platform that we're trying to build is that we are agnostic of provider. We want to go wide on providers. And so to your question, when a customer is building a specific product, we want them to choose the best provider for them.
Not the one that we are integrated to because we have this marketplace of connectivity, they can choose the one that's gonna give them the best service and ultimately the provider that's gonna give their customers what they think those customers need. So you are the platform and the [00:09:00] integrator of various banking or FinTech infrastructure solutions, but not that you build or manufacture one of your own that you're trying to sell.
I see exactly. Customers will come to us saying, I want to launch a solution that solves Forer American expats in the uk, for example. So we'll break that down and go, okay, they are going to need compelling access to British payment infrastructure, English payment infrastructure. So you want faster payments.
Sterling Accounts, probably they're gonna wanna have a compelling US dollar to sterling conversion solution if they're serving migrants from the US And there are only a limited number of providers in the market that can offer that service. And often it's not all in one, it's not a one stop shop. So where we really help is we try and understand what our customer needs, introduce them to partners that are.
The best at what they do, [00:10:00] given that subset of needs, and then integrated finance's job is to stitch it all together and bring that product alive. Our job isn't to sell our services above and beyond anyone else's. It's to make sure that the customer has access to the ingredients they need to launch that platform.
All right, Understood. So how does that work in real life? Just walk me through an example. People call you or they email you, they say, I want to launch this platform in the uk. Uh, how can you help me? And then do you need to have a workshop with them or do they fill in some basic information on your website?
Uh, how does that initial filter or conversation work? Sure. So sometimes people will email, sometimes we'll contact us, LinkedIn, we get a lot of referrals from the partners that we connect our clients to simply because. The time to live is reduced by probably an order of [00:11:00] magnitude. If integrated finance is doing the implementation.
What these providers don't really want to do anymore is deal with. Very young, hyper capable, technical people, but who are new to the world of FinTech, and they're going to trip over the same regulatory, technical, commercial hurdles when they do an integration, and that's gonna push that time to live from, say, Post contract three, four months to post contract nine, 10 months.
From a sales guy's perspective, they might even follow off the window within, they generate revenue on that signed client. That's how we get customers. But for comedic effect, let's say this particular example came from me doing cold calling and getting told buzz off 99 times, call number 100. The guy says, Yep, I wanna work with integrated finance.
So what do we do? The first thing we say, What are you launching? We detail down the ingredients of what that customer requires, and we ask, Have you signed any contracts with any best players? If they have, then it's our jobs. Let's say it's [00:12:00] currency, cloud, or rails if they've chosen them. It's our job to manifest the best of currency, cloud, and rails bank into a single APA and interface.
And how do we do that? We do a statement and scope of work calls. We usually set up a Slack channel for. Our engineers and the customers engineers. On occasion we'll have a tri party Slack channel where all three participants say the bass player, integrated finance, and, and the customer are all working collaboratively together.
Some of our customers really want a raise a sharp mobile app, so they don't wanna be going to. Uh, white label anyone's, where by definition you have an undifferentiated product. We have a, a huge team of web development agencies that have built on top of our APIs so that they can more quickly and more easily, uh, produce high quality front ends for their customers.
Whilst it's not having to work about. Work out how the backend components work. So it's really, it's quite a handheld process at the moment. As we grow, customers are [00:13:00] increasingly able to self-serve, but right now it's, it's a roll sleeves up and make sure we get the customer live. And how many people do you have and where are you based?
Where are you focusing on these days? We are in total 27. Across two main offices. One in London, headquartered in London, and we have our engineers, the vast majority of our engineers based in Istanbul. Okay, so that's clear. So. It feels like you obviously now are focusing on quite difficult integrations, right?
That the providers, as you said, don't wanna deal with. Now. How much do you rely on technology? What's your technology angle? Or for now, do you just have more brilliant engineers than everybody else or more patient? So I guess the first thing we wanna point out is the problem that we're solving. The reason we tried to solve it is because we tripped over this.
When we launched our first, when we launched our first FinTech platforms, Settled Go. [00:14:00] It's, there's a lot about technology in highly regulated environments that it is, you can't intuit the outcome of your labor. And what I mean by that is there's things that don't rationally make sense or technically makes sense that you just have to abide by and you're not able to question because in extremely highly regulated environments, One right way to do things.
And there's a million wrong ways to do things. And inevitably when you're working on that kind of probability basis, you're going to do a lot of wrong things. So what we learned while building our previous venture is what to do with client money. What? How to segregate revenues that we've made from client activity, from residual balances that customers leave on account, say overnight.
We've learned. In which currency should I derive a revenue from? If someone's converting pounds to say Vietnamese don, we understand safeguarding sweeps. We understand all of the technical stuff that hopefully the [00:15:00] listeners are yawning at right now, because that's precisely what this is. It's the boring detail of how to build a FinTech.
We've only learned that because of doing it, and our engineers have done it at a previous venture. And now we're trying to democratize access to that learning for every single other customer. Would I say our engineers are brilliant? Yes. But the key reason that we're able to deliver this is because unlike most of the people in the market, we've been through this paint as operators and it was death by a thousand cuts and all of that blood letting at a previous venture is really being pulled together for the advantage of the next generation of entrepreneurs who want to launch fit.
Understand, and also let's not underestimate this and reemphasize again, it's financial services. Sometimes the FinTech started at the edges, which were a bit lightly regulated, but as you need to expand your product portfolio, Sooner later you run into more and more regulations. Right. So it sounds like you obviously [00:16:00] have built a great business knowledge and industry knowledge as well where you can help.
I think that's right. Not only to get the FinTech launch, but also for them to stay, as you say, on the right side of the compliance and the regulation that's put in place to, to ultimately keep but users money safe. If you are not from a financial services background, you're from a technology background, I would say the aspect of running a fin.
From a compliance perspective might be hidden to you and might come as a shock. We weren't your life. So people stay out of prison. Exactly. Exactly. Okay. Maybe that's a success metric. Yeah. All right, so what are your plans for scaling up? You said you're based in the uk. How do you want to grow? I would say there's three pillars to this.
So we want this business to be a global network of providers. Currently, the providers that are connected are UK Europe focused. Right now we'll get to the scale of having providers In every jurisdiction that fintechs are [00:17:00] created, we want to increase the ability of our customers to customize the workflows that sit on top of those integrations that we provide.
So instead of having completely fixed workflows for say, taking fees from accounts that could be completely customized. And the third thing. Is giving our customers a way to totally self serve and set themselves up without integrated finances help in the first place. So self-service functionality of the platform would be the kind of the third pillar of getting to scale.
I see. And how do you make money? You mentioned banking as a service, maybe that's similar to SaaS business, but you also help clients to integrate the solutions of different vendors, so that may also resemble consulting. So which model do you follow when you are a business, when you are building your [00:18:00] business model?
We are a software as a service. You mention it, we charge a monthly subscription fee and a fee for the things that you connect to, but we don't charge by the transaction like a banking service would do. Yeah. Okay. But once somebody's finished with the integration, then they can cancel the subscription or not?
They can cancel the subscription, but they would need to be BA to continue to use the integration they pay us on a monthly basis for that subscription. I. All right. Yeah. Just to be super clear, the customer connects to our APIs and then we aggregate the various tools that they need, or if they're very young.
FinTech, we have an interface for non-technical people to use, which is basically bunch of APIs worked with a bunch of workflow automation on top that looks and smells a bit like a core, and that core will talk to the. Best provider or best providers of choice or maybe digital onboarding and transaction monitoring tools of choice to have [00:19:00] access to that platform and api.
There's a monthly access fee. , and then additionally, there's subscriptions to the number of things that you want that system to talk to. So you also have a solution for non-technical people, so that's great. That resembles, for example, Squarespace or WordPress these days. Right. So you work with blocks, you don't need to do any sort of coding.
Correct. I think that's exactly right. With it's modular and you can pick and choose which bits of that you want as well. Yeah, when we were founding the company, we were really thinking, Do we wanna be API first? API only? The temptation is to go API only, but companies have a huge range of success there.
But then we also looked at what our vision is. We're trying to increase the rate of innovation in the market, and where does innovation come from? Usually comes from the youngest startups that are trying to solve a problem that no one else is solving. We thought the younger startup is the less resource they're going to have to do stuff that the customer can't see.
And therefore, we [00:20:00] went API first, but not API only. We also found that were most successful clients, the ones that have gone to API only, but they were actually using our interfaces for six to 12 months, and the benefit of that, The customer service team, the operators, the finance team, the sales team, Once they got to grips with how they like our system to work, they were able to give much better briefs to devs, whether their own internal devs or an outsource development agency.
Having had the experience of interacting with our system, they were able to make much more intelligent calls than if they were just all doing this based on. Right, and just coming back on that point, you said they need to keep on paying subscription if they want to use your integration, but what about two, three years down the line, if for whatever reason they want to switch because they're so big now, That maybe that integration is not suitable anymore because of the volume, sheer volume or, and or what have you.
Can you not then unplug it? Do I? Do you need to go back and start your business again? [00:21:00] No, Sure you can. You can. You can unplug any integration and repl in a new integration. For example, if you wanted to remove a banking as a service provider, Because you've scaled exponentially and now you have to go to one of the large global transactional banks.
We also have those integrations on the marketplace, and you would simply unplug the banking and service provider unplug in the transactional bank, uh, from their perspective. From a customer's perspective, there would really be no difference. They just replace one API key with another API key, and, uh, services continue as usual.
I see. Okay. All right. Understood. So before we go, I just have two easy questions for you. First of all, what is your favorite business book or any other resources? I'll go broad if that's okay. So I think reading anything that was written by, Warren Buffet or Charlie Munga is worth reading. They're both phenomenal communicators and the experiences that they can convey are [00:22:00] worthwhile anybody, not just that.
People outside business reading. The other thing, the other kind of author that I'd recommend to anyone again, is Broad, but anything by Natel Ed, all of his books are phenomenal and I think I've actually shaped my thinking about being an entrepreneur in terms of how and when to take risks. I see. Great.
And I suppose for me, I think one of my favorite ones was Shoe Dog by Phil Knight, founder and creator of Knight, just to understand how close they, they were to going bust at almost every moment of the company's existence, purely because of Phil Knight's. Persistent insistent on growth and making sure every penny earned was a penny spent on growing the business, which effectively meant their runway was for the first six or seven years of their life.
Just to see how he applied that pressure for the company to grow and look at it now, as well as interesting little tidbits that I would never have [00:23:00] conceived of. I think one of, one of the, one of the comments from one of the guys in the executive team. Was everyone would roll their eyes when Phil would hire another exec because it was always either an accountant or a lawyer, and it could be head of marketing, head of sales.
It didn't matter. It was always an accountant or a lawyer. And the reasoning was there are tough skills that require years of dedication for someone to attain. And just because someone's attained an accounting degree or a law degree should not pigeonhole them into a, adding that subset of skills value to a company.
And that really. Opened my mind on who can be successful at what. So yeah, that would be mine. My other would be Lord of the Rings, but that's not relevant, just cause I love it, . Okay. Fair enough. Great stuff. So what's the best way to reach out for people and uh, what kind of people would you like to hear from most, whether that's investors, clients, or potential employees?
What are your priorities these days? We would like to hear from anyone who's thinking about [00:24:00] starting a FinTech. However big or small, we would love to speak to them and see how we can help. We know that there are loads of FinTech ideas that don't get built right now because of the fixed cost element of getting the thing live in the first place.
And that's the problem we're tackling. We want to enable all of these ideas to be brought to life, um, as quickly as possible. I would say anyone who's got an idea, the germ of an idea in their brain, please reach out and speak to us cause we think we can. All right. Brilliant. And what's the best way to find you?
You can go@www.integrated.finance. You can find me now pretty easily on LinkedIn. Those would be the most simple ways to find us, I guess. All right, brilliant. So thank you so much. Good luck A and Dan and Integrated Finance. Thank you so much. Thanks so much.
Thank you for listening to Voice of FinTech podcast. [00:25:00] If you haven't already, check out also voiceoffintech.com, where you will find all the episodes and additional resources related to the podcast. You can also subscribe to Voice of FinTech on Apple Podcast, Spotify, Google, or any other podcast app that you like.
If you have any suggestions on the topics or guests or how to make this podcast better for you, please email us at info@voiceoffintech.com. Happy to hear from you. Thank you.