Building the Future of Open Banking: The Vision Behind Finqware

Speaker A: Welcome to a new episode of the Elevator Ventures podcast. I'm Mara Ene, the PRN Marketing Manager at ev, and I'm excited to be your host in our journey through venture capital and innovation. From Vienna, right in the heart of Europe, we elevate your growth. Today's spotlight is on Finque, one of our portfolio companies and an innovation driver in the world of open banking. Join a discussion between Maximilian Schaussberger, managing director of EV, and Cosmin Kosma, co founder and CEO of FinCware. In this conversation, Cosmin shares his journey from banking to entrepreneurship and discusses how FinCware is transforming financial management solutions. They also explore the future of open banking and the role of AI in shaping its evolution. Let's dive in.

Speaker B: Welcome Kosmin, uh, to the Elevator Ventures podcast. I'm um, super happy that uh, you're here with us today. I know you are a talkative person, but I also know that uh, you have substantial experience over the last few years in building your company thinkware, and you are a thought leader in open banking for sure. Kurzman, you're not only the CEO of Finque, you're the president of Romanian Fintech association and uh, since many years one of the voices of uh, fintech in the country. Can you share a bit your story? I know you started as a banker initially. So what led you to come where you are today?

Speaker C: Yeah, I started 20 years ago. I started to uh, activate my uh, to be active in banking. But uh, it's very cool when I say this, but I started in banking as an entrepreneur, uh, because my first experience in banking was uh, being owner of a franchise bank branch for a big international banking, uh, brand. Uh, so I started from scratch a bank branch. And um, that point from the beginning, from 20 years ago, uh, that was a very active uh, feeling, uh, that the banking as it was, uh, at that uh, stage needed to change. And the technology will definitely uh, make this uh, change possible. It was the years of uh, uh, uh, Apple, iPhone, uh, coming uh, into the. Into the world. So uh, it was clear that technology will do something that will uh, shift uh, the way in which the banks and the customers are interactive. Um, at that point, as you remember 20 years ago, the branch were only uh, uh, like a shop in which you bring some paper or take some paper. Yeah, that was the point. And a lot of people and that the connectivity, the mobile connectivity started to be uh, uh, to be uh, available, uh, technologies to do, uh, broadband connectivity started to uh, come. Uh, and I understood really that uh, These physical paper interaction between the customer of the banking ecosystem and the banks is not needed. And it creates a lot of um, lack uh, of efficiencies in the, in the, in the financial system. And um, since then uh, so I had that uh franchise branch, I sold it and then I went back as a corporate employee in different banking banking institutions like Fallsbank for example, the Austrian Fallsbank. I used to work for them uh several years. Uh and that idea that the banking will be at some point shifted uh to a technology first interaction channel, uh was the fact that uh uh was in my mind all this time. Later in 2013, um, I decided that I don't want to be a banker for the rest of my life. Uh and uh, I went back in entrepreneurship and in 2017 I heard about PSD2 and Open bank incoming. And that was like you know, that moment, every come moment. Yeah. This is the channel, this is the channel that uh will be really shifting the way in which customers uh will enter, interact with their banks. And this is the open stage of uh thinkware. In 2018 I put myself uh a team of founders and we started uh, uh this very great journey. Since then.

Speaker B: It's great that uh you mention it and uh, I think in 2018 it was when you and the team have uh applied for Elevator Lab, uh the accelerator program of uh rbi, uh in Romania and you have won it in Romania.

Speaker C: And by the way they were the first money that our project uh uh uh got uh, from uh, as revenues, uh, indeed. I mean if you look at it

Speaker B: today and where you started in 2018, what was your view on this open banking opportunity that it was and presented to everyone in the industry? How did it develop and what would be your view on open banking today?

Speaker C: It was 20, uh, uh 18 at the beginning of 2018 when I put together the founding team of Fincler, uh I took as a matter of fact uh two friend of mine. One of them was uh, in Dubai, was located in Dubai and uh, uh was uh technical consultant, uh uh, designing critical infrastructure for telecoms in the Arab world and the Middle East. Uh and uh, I said to him Mittel, come here. We need a CTO for a very nice project. And the other one was in Malta, um, who he was operating, uh chief uh operating officer for the digital bank with worldwide uh operations. And I said the nuts come here. Uh, we need to do something very cool. And then we started to think okay, this open banking, it's API interconnectivity, this API technology. What can bring uh to the people, what good can bring to the people? Initially we said okay, what if we have an application in which we have all the banks, uh, all the financial providers, not only the banks, in a single personal finance management application, uh, because we right now can interconnect all uh, the financial providers in a single application. Instead of a folder on your iPhone or on your uh, mobile phone, you have a single application for it. And we started to go uh, and pitch this because we believed that aggregation of the financial services uh, for the retail persons will be very cool. And we still believe this but at that time it was a little bit too early as we learned later. So we got okay, the first price and I need to tell this, the first price and the first revenues that we had were the local hero words from Elevator Lab, uh, by uh, Rafeisenberg International. And it was very cool that it was a validation. What we want to do is cool. Then we, there were several other awards. We started to have revenues from awards in the first year. And one particular award, uh, which was uh, I won't mention the bank, but it was a global bank that was given to us in Varshow, uh and it was also the big prize there. Uh, it was called PSD2 challenge for different startups. Um, in November 2018 after getting that award that bank called us their global uh, headquarters, uh, corporate global headquarters in London. And uh, it was very weird for us. We didn't know what they want from us. And uh, that headquarter, uh, we had a very insightful uh, uh meeting in which uh, their team from the corporate banking said to us guys look what you're doing there. It's good for the retail uh, customer for a normal person, but it's not that uh, value added for that normal person at this stage. And uh, if you look for example for corporates for enterprises, the cfo Vodafone or the CFO or omv, uh, in order uh, for him to have a uh, clear vision of the cash position of his company, he needs to ask for a report for each and every subsidiary in each and every country in Europe. While your technology at this stage can be potentially a technology that can help him to have real time availability of the cash position of the whole group of companies. And this, we cannot do it as a big bank, one of the top, biggest banks in the world, but you can do it with your technology and you are more agile and you can do it. Uh, and that was from the initial insight of going in the retail space. We understood that okay, retail space is A marketing battlefield. It's not a technology battlefield. While enterprise, it's a technology battlefield. We can fight in the technology battlefield with 10 people, but we cannot fight in the uh, uh, marketing battlefield with 10 people. And I said okay, uh, let's focus. Yeah, let's focus. And that was the big pivot that we started. Beginning of 2019, exactly one year after we started the company, we pivoted, we killed everything. We even have an application for the consumers. We killed everything in the retail. And they said we want to be the leaders of a new SaaS category called Treasury Management Automation. It doesn't exist. But you uh, heard uh, you didn't hear about it uh, because we invented uh, but we will be the leaders of it. And that was, I remember very well,

Speaker B: it was exactly um, this vision that you were presenting to us, uh, that uh, led us to um, actually decide investing in uh, your uh, first round of institutional investments and um, that you have successfully followed through. You have uh, acquired the license of uh, the national bank of Romania that was or is necessary for such a business.

Speaker C: It was very hard.

Speaker B: You have launched successfully um, the product that you were talking about, uh, in 20, uh, 19. Um. Can you maybe tell us now in a few sentences what is the product, uh and uh, what are the use cases and uh, maybe to make it more tangible. What do your customers love about it?

Speaker C: Mhm. So when we started to discover this new world we were initially in the retail. In the retail, it's easier to uh, understand because we all are retail customers of the banks while in enterprise, uh, it's not that easy. You need to do. And we did, I don't know, thousands of hours of discovery, uh discussions with uh, enterprises in order to understand. Okay guys, uh, how can we help you? How can we can uh. We put technology at work, put open banking at work in order to help you in your day to day uh life. And then we started to understand that there is the opportunity to create uh, kind uh, of an operating system for the businesses in terms of financial operations. Because if you look at a company, a big company, uh usually they have multiple uh, bank accounts, not one multiple bank accounts because they have multiple operations within a company. Uh, most of them have Multiple entities or SPVs, not one each and every SPV having multiple bank accounts, working with multiple uh, uh providers and not last to be said, most of uh, important companies have different geographies they work with. So if you put together all the tokens and access uh, users uh, of different banks in different uh, uh, geographies in different entities. Then it is a big mess. And starting from here we understood that our technology can aggregate this access to all the banks in a normalized way, in a structured way so that the data flow from the banks can come to the organization, uh, in a single format. Uh, we even can create kind of a data lake for that organization with all their financial uh, data which uh, previously for audit purposes was in PDFs or even in paper. Right now they have it in a very digital way, in a structured way. Uh, the audit can come and can audit uh, that data very, very uh, easily. Uh and then we understood that, okay, they need also uh, to interconnect some of their applications like ERPs, like SAP, Microsoft Dynamics and other. They need to interconnect with this flow of data, huh? Yeah, uh, because uh, in this space there were no real good uh, uh technologies. The only technology that it is used only by the very, very big companies is a technology based on Swift, uh, standard, uh, called MT940 which was invented in 1977 so before I was born, uh, and they are still using it and provides the statements only for the yesterday. And you need to do a project of implementation with each and every bank. For example, we have a company that has 20 banks in nine countries. For them it will be like building a pyramid, uh to implement with each and every bank, uh, uh, uh, uh, private host to host connectivity and it will be um, very expensive. While with our API they only have one channel of data in real time. Not only for yesterday, like 10 minutes ago. I can have all the transactions that were done. And not only this, uh, I can also have uh, uh as a company through Think treasury, our platform, like I said, operating system, uh for uh, financial management. I also can have a single hub to initiate payments in all these countries, in all these entities and in all this. So this is mind blowing. Uh, when we uh finally launched the product, it was hard to launch the product because when you are in fintech and in a regulated uh, part of that fintech, uh, the preparation, the product development, the security and the regulatory burden is so big that it takes you more than you expected. So I dreamt to do it in two years, I did it in five. Yeah, uh, that's the point.

Speaker B: Ah, today you have uh, plenty of uh, renowned names as customers and uh, they all apparently love your product. Kuzmin, can you tell us a little bit, give us an insight. Looking forward, where do you see thinkware and the overall uh open banking environment. Uh, but thinkware in particular developing first

Speaker C: of all let me tell you this very straightforward. I cannot see a future of uh, financial services without API interconnectivity, open banking. So I cannot see a future of financial services without open banking. Um fincware is already at least at the regional central Eastern European level, uh one of the most prominent brand, uh not only brand but technology provider for open banking. We started to have spontaneous uh requests from Croatia from multi entity companies in the region uh that are coming to us because they already uh saw us and they want to uh, uh use our technology. So really thinkware, uh has an opportunity to be a market leader in the European, at least in the European uh financial ecosystem because we can operate in 30 countries. We already connect 15 countries right now uh in the new wave of payments, let's say I would call it new wave of payments meaning based on real time data connectivity, real time payments and API account to account payments, we are there. Maybe the wave is still not at its peak, uh but we are building our board to serve this wave that will come for sure in the next three to five years.

Speaker B: Sounds exciting and uh, I think plenty of people are currently looking at uh, um, the passwords of PSD3 and the feeder regulation uh and uh, what they will actually enable and bring in uh open banking. And knowing what thinkware plans um, uh I can only say it stays exciting. And the uh value that you can create with uh these uh open banking trends for the clients is immense.

Speaker C: Yeah, indeed. It's very nice to see that even the regulators are using us from time to time as an example of uh implementation uh in a uh profitable way because we are already profitable. We uh already created a business model that creates value not only for the customer but also for the shareholders. So uh, it's very nice to see the regulators having slides uh with thinkware, uh about what's uh this open banking all about, uh at least in Europe. And yeah for sure uh the future is bright because uh psd3 will come uh, uh not only to make a revolution but an evolution of already something existing. It's good for us because we already have a setup, we already have a vision and PSD3 uh makes exactly this uh uh, puts more pressure on the market and on the ecosystem to move in the vision that we already uh set it up internally in finquel and we are very, very much uh, very m Much looking forward into this and of course it's something that I want to mention, uh there is a big opportunity. Everybody is speaking right now but I don't want to miss to Speak about this with AI involvement into our technology, as I told you, we create some data lakes for each and every company with all the data structured. And while the technology, the technology it is already democratizing, the real gold is the data on which you can apply the technology so that you create value for enterprises. And we are prepared uh, to do this. As a matter of fact we are just starting a POC with one of the big AI providers in the world. Uh, and uh, you will see uh, open banking. If you combine open banking with AI, the impact is even bigger.

Speaker B: A match made in heaven, so to say. No, thank you so much and cosmen, if someone got now uh, interested to learn more about Finque and uh, maybe to get in touch with you personally and uh, discuss the opportunities of open banking. Where can they find you? Where can they find Fincware?

Speaker C: So thinkware, finque.com. uh me on LinkedIn. I'm most active in LinkedIn Cosmic Cosmo on LinkedIn. Uh yeah, follow me, contact me. It's, I'm very open to, to, to it.

Speaker B: That's straightforward. And now cosmet, we want to um, go before we say goodbye, we want to go to our elevator questions uh section where we want to get to know you uh a little uh, bit better, um, by um, by uh, giving you the start of a few sentences and I would kindly ask you to simply finish the sentence that I'm about to start.

Speaker C: Are you ready? Yeah, ready.

Speaker B: The best growth hack uh to sell my product was to have person to

Speaker C: person interactions, to network, to uh, have uh, events, to be present in events, even to drink a glass of champagne near uh some sushi with the customers and with the partners.

Speaker B: Sounds good. And uh, I can confirm uh, I had the pleasure to eat some sushi with you uh as well we do

Speaker C: this, we have a traditional sushi and prosecco party for our customers and partners. Uh and uh, yeah if you're in one of these type of these days, let me know on LinkedIn and uh, you are invited.

Speaker B: Second question. I knew my product reached the proper

Speaker C: market fit when, when the customers asked me how are you with the cash flow? Can we pay in advance to help you? And this happened. Uh, it was very good for us, uh that we saw our customer. You know, usually when you look, when you work with big enterprises when they see that uh, the company, their technology partner is a little bit weak, they tend to not risk a relationship further with that company. While in our case we had the situation in which our customers said okay, we want to pay you in advance, one year, one and a half years so that you don't have issues with your cash flow. And that is the point when the market fit. Uh, you know, uh, was a confirmation that was.

Speaker B: There was definitely. I remember that situation. There was definitely a huge commitment by the customer, um, uh, a big sign of uh, product market fit. You're uh, right. Luckily today, uh, you're not in such a situation anymore and so it's not needed anymore. Third question comes in. If I were not a startup founder,

Speaker C: I would be a philosopher. My university studies are in philosophy. Uh, I dreamt to be a university professor in philosophy. Uh, then, uh, that I knew that uh, uh, I need to live a little bit more in the world. Uh, but I still dream to take back my uh, hundreds of books, uh, in a remote location and uh, read it and maybe write uh, about uh, philosophy and uh, the culture of the world.

Speaker B: Very interesting. Uh, I didn't expect this answer and uh, last but not least, the best advice I ever received was

Speaker C: going back, but I told you that I'm a big fan of Martin Heidegger, the German philosopher. Uh, uh, sometime, uh, back then, uh, the best advice I ever received was from a vc, from a business angel, an important business angel. And I will tell the advice related to uh, the startup world and to the uh, founder life was prepare for success, usually. And he said, uh, usually the founders, uh, the startup founders are looking at the risks. What if I don't, uh, have this milestone reach? Then I need to go to that and to that. Always mitigating the risk and creating backup, uh, scenarios. But while putting a lot of priority in mitigating the risks, most of the founders forget to prepare themselves for the big success. And then some of them are uh, taken, uh, by surprise by their big success. And it also can be a moment of failure. And uh, that was so I prepared for success. And I'm prepared. I'm very prepared for success.

Speaker B: Sounds good. I like that. Thank you cosmen for answering our elevator questions and thanks, uh, for this exciting conversation, um, here in our Elevator Ventures podcast.

Speaker C: Thank you very, um, thank you very much.

Speaker B: Thanks for being with us.

Speaker A: That wraps up another episode of the Elevator Venture. If you like this episode, make sure to subscribe to our channel and leave us a review on your favorite podcast platforms. Also, if you'd like to be featured, know an interesting startup or just say hi, send us your thoughts, uh, @officelevator-ventures.com until next time, keep elevating your growth.