" class="no-js "lang="en-US"> EXCLUSIVE: "How to win friends and finfluence people' - Jeremy Baber, Lanistar in 'The Fintech Magazine'
Tuesday, April 23, 2024

EXCLUSIVE: “How to win friends and finfluence people’ – Jeremy Baber, Lanistar in ‘The Fintech Magazine’

Lanistar launched on the back of a unique Instagram campaign in the UK before leaving to make its mark in Brazil. Now it’s preparing to return. CEO Jeremy Baber talks openly about success, past missteps and the digital power of persuasion

Lanistar didn’t arrive on London’s fintech scene quietly in 2020: it was an event. Lined up to promote the nascent neobank on Instagram were Premier League footballers, reality TV stars, models, influencers, and Ibiza club owner Wayne Lineker. Out roared a branded Bugatti, followed by a ‘life-sized’ plastic unicorn, emblazoned with Lanistar’s four-point logo, indicating the size of its ambition. It was breathless, it was gratuitously flashy and, if you were to ask a social media marketing expert, it was brilliantly orchestrated to get the maximum number of ‘clicks’… and, quite possibly, the maximum kickback from the establishment. It got both.

The UK’s Financial Conduct Authority (FCA) issued Lanistar with a scam warning before it had fully launched. Then, the Advertising Standards Authority (ASA) began an investigation around Lanistar’s claim to offer ‘the world’s most secure payment card’, ruling in 2021 that this claim could not be substantiated. A Business Insider investigation reported that Lanistar’s founder, Gurhan Kiziloz, had no previous experience in finance, technology, or banking (to be fair, not unique for a fintech founder) and that Lanistar’s reported £15million raise, in July 2020, hadn’t come from Milaya Capital, as had been stated at the time. In a matter of months, Lanistar wasn’t so much famous as infamous.

Has it hung like baggage?

“Yes, it has,” says Jeremy Baber, who was appointed Lanistar’s director of banking in 2021. “But those were mistakes – they weren’t deliberate. And the FCA warning was taken down within 36 hours. That’s never happened before.”

Lanistar moved on and out of the UK – to Latin America. Baber, who had decades of senior management experience behind him at GE Capital, Link Financial and Aldermore Bank, brought it credibility. He would be promoted to CEO later the same year, taking the reins from Kiziloz.The security section of Lanistar’s website now reads ‘our payment cards are probably some of safest in the world’ – using what Baber calls ‘the Carlsberg approach’ to marketing claims.

THE SOCIAL NETWORK

Lanistar hadn’t set out to compete with challengers offering full-suite banking services. In 2020, it had partnered with Modulr to create a payment card concept similar to Curve, whereby users could choose to pay, transfer, and split bills from up to eight payment cards held on the Lanistar app. It was neat, but not new.Modulr would provide these payment services as a regulated entity, and Lanistar would act as intermediary, passing them on to end users behind its branded UI. Other than its app design, and Lanistar’s fetching array of physical cards – since deemed by the neo to be environmentally unsustainable and discontinued – it couldn’t offer anything that wasn’t already available elsewhere.

“But it’s not actually about the core product,” says Baber. “It’s about the reach that we have with our influencers.”

In fact, it was Lanistar’s approach to marketing – giving its payment offering the glow of an aspirational lifestyle product – that attracted Baber to the company in the first place.“I was sold on the concept,” he says. “Using influence to sell a financial product was just unheard of. It’s such a strong USP. Lanistar, at its heart, is a social media business – but we found quite a niche.”

“Lanistar, at its heart, is a social media business – but we found quite a niche”

And he clears up any lingering confusion over who precisely owns equity in the fintech. “The beauty and the art of what our founder did was to set aside equity in Lanistar for influencers,” reveals Baber.

“So, instead of being paid for each post, or for each campaign, our influencers have a vested interest in Lanistar succeeding because they have shares in the company. “That’s what sets us apart from our competition. All our competitors have already used up their equity share in raising funds, so the only way they can gain customers is by buying them through marketing. This way of using equity to market your product was a game-changer for me.”

And it works. Lanistar already has as many Instagram followers as Revolut, the UK ’s largest fintech by market cap, and has three times as many as Monzo. By this metric, Lanistar isn’t just changing the game – it’s winning it. Of course, a business model built around Instagram reach predetermines Lanistar’s target audience.

“It’s all about Gen Z and Millennials,” says Baber. “No offence to anybody else, but that’s the target market. That’s the market which is always on their phone, always looking at their favourite stars and influencers.”

STARS IN THEIR EYES

In the UK, US, and across Europe, roughly three-quarters of people aged between 18 and 30 are active users of Instagram. In one of the few studies to look at so-called ‘finfluence’, more than half of Gen Z and Millennial survey respondents confirmed they sought out financial advice on social media. Among Gen Z specifically, 51 per cent said they’d taken financial advice from an online personality.Meanwhile, the total number of Instagram users is forecast to surpass 2.5 billion this year – nudged on by Meta’s July release of its Twitter rival, Threads, which is accessed via Instagram. In short, Lanistar may have caught everyone else in fintech napping by leveraging influence to market its product.Lanistar said it arrived to ‘unprecedented interest’ in Brazil. In October 2020, it booted up its Brazilian influencer marketing campaign and three days later, 100,000 people were pre-registered. It wasn’t long before the firm was able to officially launch, with São Paulo-based Bankly taking the role of domestic service provider.

“Banking-as-a-service meant we were ready to roll,” says Baber. “With a partner that allows us to get live in a country, we can do it within three to four months.”Lanistar didn’t have to spend time chasing a banking licence, nor did it struggle to embed Brazil’s unique payment architecture in its app. The modules offered by Bankly saw to that. As such, Lanistar is fully integrated with Brazil’s Pix and Boleto payment systems. It’s certified with Google Pay and coming soon ApplePay – relationships it can carry with it into other markets. In June of this year, Lanistar added a cryptocurrency function, enabling Brazilian users to buy and sell Bitcoin, Ethereum, and other tokens directly from the app. And all the while, a network of 1,200 influencers and over 195 million people, drip-drip promotions into Instagram feeds across the country.Lanistar’s model seems to be working.

“By the end of September, we’ll probably have around one million accounts in Brazil, and by the end of 2023, two to three million accounts,” predicts Baber. If those figures are realised, Lanistar will be in a position to give Nubank, the largest fintech in Latin America, a run for its money in terms of users. Propelled by its success in Brazil – where, according to last year’s Statista Global Consumer Survey, influencers have more sway over purchasing decisions than in any other country – Lanistar is now preparing to relaunch in the UK and EU. In April, it bolstered its C-suite by hiring Ed Blankson, formerly of Tide, as CFO, while experienced executive Merton Smith arrives as CCO. With dozens of influential thumbs poised over the ‘post’ button, the final piece of the jigsaw will be Lanistar’s selection of a full BaaS partner to provide its services in the place of Modulr.However, it will return to a regulatory environment that is no less sceptical than it was in 2020.

The Consumer Duty Law, enacted at the end of July, has set higher standards for payment services providers and the FCA and Advertising Standards Authority have together produced clearer guidelines on influencing. “It is important for this type of marketing to be regulated but that is exactly what it is – ‘marketing’’. Like Ant and Dec advertising Santander mortgages and bank accounts,“ says Baber. “Social media influencer marketing is the next form of advertising.

“ In the meantime, growth remains the name of the game. Lanistar recently opened an operational centre in Dubai and has formalised a customer service partnership with a firm in Skopje, North Macedonia. It’s ready to roll with a BaaS partner in 50 US states, where there are 177 million people in the Gen Z and Millennial age bands. Turkey, with 50 million more people in Lanistar’s target market, is high on the agenda, too. And orbiting all this are thousands of influencers – Lanistar says 3,000 have shares in the company – spread across 100 different countries.“Our goal, at the moment, is to acquire customers at a cost-effective ratio,” says Baber.

He’s confident that Lanistar is doing that far more effectively than any other neo, keeping its focus firmly on the customer while its BaaS partners handle the technical side. With its initial naivety behind it, and Baber at the wheel, it may arrive back in the UK as a finfluencing force to be reckoned with.


 

This article was published in The Fintech Magazine Issue 29, Page 68-69

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