By Daniel Lanyon on Friday 24 March 2023
AltFi speaks to the CEO and co-founder of FintechOS on the future of financial technology innovation, ChatGPT and more.
After a decade of fintech disruption, in 2023 the game is set to change as banks and fintechs trade places.
Fintechs have had a rocky ride over the past 18 months or so, prompted to focus more on profitability over growth to steady the macro-induced turbulence. Regulatory demands too across consumer protection, lending and crypto are increasing.
Big banks though, until recently when the collapse of SVB and Credit Suisse exposed systemic balance sheet risks, are turning a longer-term corner in terms of digitalising legacy technology systems with profits boosted by higher interest rates.
As fintechs focus on the fundamentals, banks have a window of opportunity for more cash to mount a resistance to the fintech challenge.
These bold predictions, made just before the recent banking market crisis, come from one of Europe’s largest B2B fintech CEOs.
“We’re enabling everybody. The new guys and the old guys,” says Teo Blidarus, CEO and co-founder of Fintech OS who wants to bring the idea of simplification and lower barriers to entry to innovation in financial services and banking.
This comes from allowing people to “self-serve” when they are using fintech infrastructure to build products or design customer journeys through low code platforms that reduce developer costs.
“We consider that any company can be a fintech, this these days in terms of innovation and speed of innovation with financial products and services, but also in terms of operational efficiency, which obviously has become very, very important,” he said.
Rather than the more expensive route of hiring endless software developers, Blidarus says future financial companies will be able to launch new products in a day.
“Low code and general artificial intelligence will become more of the norm. Pretty much everybody is going to use them in the same way everybody is using social media tools. In that way, a creator economy is going to become more prevalent in the financial services space," he said.
Blidarus is betting that B2B fintech infrastructure will be the biggest winner when it comes to innovation in financial services, in part as larger firms re-find their swagger as well as through increasingly diminishing barriers to entry for fintech startups.
“The traditional players have bounced back. That is a fact. JP Morgan, HSBC, Societe Generale - they have an entirely new division focused on e-commerce and banking-as-a-service products.”
“You can’t just come into this space and say we are a banking-as-a-service startup. Because you are going against a monster with a lot of cash, power, distribution and infrastructure when it comes to risk management and regulation. They have bounced back.”
Artificial fintech intelligence
One area where Blidarus sees huge change is how generative AI, through platforms like ChatGPT, could further lower barriers to entry when it comes to the lifeblood of fintech disruption. Software development.
Over the past 10 to 15 years, he says, its rapidly rising costs have “become a problem”.
“There are not enough developers, there are not enough techies in this world, In order to leverage all the opportunities,” he said.
“What's happening with artificial intelligence and no code, low code, it's pretty obvious that we're ripping down those barriers, and we're saying, no, you don't have to be a genius with five years of Java development in order to have an innovative fintech startup,” he said.
Fintech OS was founded in 2017 by Romanian entrepreneurs Teodor Blidarus and Sergiu Negut and is co-headquartered between London and New York. Its products include embedded loans, embedded credit cards, and embedded insurance products.
Its customers are large financial institutions such as banks and insurers as well as other fintech companies.
This includes the likes of Groupe Societe Generale, BPC, in Europe, Admiral here in the UK, Scotiabank in Canada, and Insurance broker Howden.
For both markets, it helps these other companies launch and roll out new products by providing a ‘low code’ platform focused on speed.
“There are two or three things that are going to become really prevalent in this market. One is going to become a golden year for fintech infrastructure. there is going to be a lot of investment. There are now fintech startups. here are traditional financial services providers. These companies are glueing the whole market together.”
This has been something of a passion for Blidarus who has spent 25 years working in financial services IT in various forms. Aged 30 he founded a technology consulting company, moved three years later to London and ran it until 2017.
“Sometimes 300 developers are needed in order to launch a product or service.”
From an early stage, we pushed into this idea of self-service, allowing people access to a highly complex infrastructure that allows them to operate in regulated markets or allows them to deal with problems such as data, bringing that data together, but also empowering them to do stuff easier and quicker, without an army of developers.
“We were working with insurance companies and with lenders to help them establish more of a customer-centric backbone in their operational approach to build-to-market,” he said.
This included partnering with the likes of Salesforce and Microsoft to serve bigger players.
“It was, then that we started to learn how cumbersome the technology adoption is in that space,” he said.
“There are a lot of promises around deploying this type of technology, the technology was quite costly. But the overall progress was very slow, which made the whole approach quite impossible,” he added.
Fintech OS grew rapidly in Central and Eastern Europe, and soon moved to London. Four years later, it opened up shop in North America, where it then co-headquartered. The two financial centres remain its strong focus.
Blidarus says he is in the for the long haul, despite eyeing an eventual stock market listing and this being his third company.
“The most important thing for me is to build a company that is fundamentally going to change the industry for good and is going to stick around for 10 to 20 years from now. I want this company to endure.”
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