Exclusive: ‘Unlocking the power of partnerships’ – Louisa Murray, Railsbank and Aaron Holmes, Kani Payments in “The Paytech Magazine”
A good partnership is the key to many successful fintech ventures. We asked Louisa Murray, COO Europe for Railsbank, and Aaron Holmes, CEO of Kani Payments about how you build a strong one, the fallout from Wirecard, and how open banking is shifting the dial
The Wirecard scandal was a standout moment in a year of standout moments for the payments industry. The repercussions continue to be felt, but it’s encouraging to see other fintechs and financial institutions stepping in to help contain the damage.
Earlier in the year, Railsbank, the London-based banking-as-a-service platform, agreed to purchase Wirecard Card Solutions, taking on its card technology and associated assets, including existing client business and some employees.
2020 has been something of a landmark year for Railsbank. Following its $37million fundraising round, the rapidly growing fintech has just announced, at the Singapore Fintech Festival, the launch of its Houston no-code platform and Open Railz application programming interfaces (APIs), which will make embedding finance into apps and customer journeys as simple as ‘point and click’. It has achieved this by deconstructing all financial products into core digital components, enabling Railsbank to do for financial services what Apple’s iTunes did for the music industry.
It’s therefore a busy time for Railsbank, and the company relies on its partners to share the load. One such is Kani Payments, which develops software that helps fintech companies run their operations and finance functions more efficiently. It takes data from processors, card schemes, banks and more, and creates automated reconciliations and best-in-class reporting.
Railsbank has been working with Kani Payments (which was recognised by the European Payments Association as the 2019 Leading Payments Start-up) for around 12 months. Interestingly, Kani’s CEO Aaron Holmes started his career in Newcastle Building Society’s card solutions team – which was then acquired by Wirecard, which, of course, has now been acquired by Railsbank.
We brought Holmes and Louisa Murray, Railsbank’s new European COO, together to delve into the power of partnerships, hear their thoughts on the importance of a clear and comprehensive dataset, and how they see open banking progressing.
The Paytech Magazine: Can you tell us a little more about the companies you work for and your specific roles?
Louisa Murray: I’ve been at Railsbank pretty much since the beginning. I was employee number four, and we’re up to 200-plus people now. I’m head of everything customer-facing at Railsbank, and that includes sales and marketing.
We’re an enabler. We have a platform that allows any type of company, whether it’s a fintech, an insurance company, or a retail company, to embed financial products into its offering. It’s white-labelled, so we do all the heavy lifting in the background; we’re the building blocks that allow our customers to concentrate on their frontend, and their customer acquisition.
Aaron Holmes: I’m the founder and CEO of Kani (a play on the word ‘canny’, meaning good with money and also a north eastern English phrase meaning ‘good’). As you might guess from that, we’re based in the Northeast of England! But we are rapidly expanding to other countries now. Prior to this, I was the COO, and then chief innovation officer, at Global Processing Service, the transaction processing platform behind many fintechs you’ll be familiar with, such as Starling Bank, Revolut and Curve.
I founded Kani two years ago to try to solve a problem that we repeatedly saw: companies understanding their data. They needed a technology system capable of actually dealing with the massive transaction volumes going through their platforms and coping with the difficult files you sometimes get from companies in the payments ecosystem. We’re trying to help companies to upskill their teams, drawing on our knowledge about the differences between a reconciliation date and a settlement date, and why that makes a difference to reconciliations and payments. We’re a team of 13 at this point, building up to 18 with our current recruitment round.
TPM: The payments industry has gone through huge changes. How critical is it going to be to have a complete and clear dataset?
AH: Absolutely critical. I think a lot of companies knew how important it was before, but the issue at Wirecard really rocked the fintech industry. It’s damaged confidence in some of the great things that companies are doing. I can already see on the horizon indicators of increased regulatory scrutiny, and
I wouldn’t be surprised if the UK regulator, and other regulators around the world, looked at what happened with Wirecard and put steps in place to make sure it doesn’t happen again. Increased regulatory scrutiny, and the ability to evidence, on demand, exactly where all your money is, that all payments are reconciled, and that you’ve done everything you were supposed to do, is going to be incredibly important in the future.
LM: We’ve got an absolutely enormous range of customers, from startups to the big brands, and they’re all at a different stage of their lifecycle. We needed to have the tools to be able to reconcile at transaction level, and as deeply as we could. It seems really simple, on the outside, but actually, it’s really, really complex. We knew we were never going to be able to build that in time ourselves, so we had to partner and Kani was very much geared towards the type of company that we are, and, like us, absolutely focussed on automating processes.
TPM: Would it be fair to say that fintech has always been defined by partnerships?
LM: Yes, because fintech wants to move quickly, and you cannot sit back and think about what you’re going to build over the next few years. You want to be there immediately, you want to be allowing your customers to move quickly, so you’ve got to move quickly. Unless you’ve got an absolutely enormous budget behind you, and a cast of thousands, you need to partner smartly to get to where you need to be.
AH: I think that’s why the UK fintech industry has been so successful. It’s done a great job of fostering the right sorts of partnerships between companies. Its success has been in implementing microservices, and the idea that individual modular components can be swapped in and out, and worked on, without it disrupting the entire system.
TPM: Scale is, of course, so important, but it can come with its own set of hindrances. When it comes to the risk/reward in a fintech partnership, do the opportunities outweigh the risks of partnering with another organisation?
LM: Yes, I believe so. But it has to be more than just a contract. It has to be something that you both believe in, and want to do together. And the beauty of fintech is that everyone’s growing up and doing it together. So, we can have mutual customers, and we can introduce other customers. We’ve both got to be helping our customers get to where they want to be, to be successful.
AH: The culture of the organisation is very important. When determining who to go to market with, it’s not just about the technology – the cultural fit has to be right, too. That’s what really makes a partnership greater than the sum of its parts.
TPM: Finally, open banking has been a real enabler of fintech growth, especially in terms of collaborations and partnerships. What do you think open banking can do for card schemes also moving forward?
AH: There’s been an interesting debate, in the past, around whether open banking was a threat, or a complement to card schemes. I think what we’ve seen, though, is that card schemes have really embraced it, and they are trying to align the solutions they provide to the open banking infrastructure. We’re at the level, with our platform, where I think we have about the same volume of card payments and non-card payments flowing through for reporting and reconciliation. So, clearly, companies and consumers are adopting open banking, and I think it’s really up to the card schemes to embrace that technology and keep up.
LM: I think there’s still an enormous amount to do before open banking realises mass adoption. We’ve got lots of customers who do use it, and that’s led to more business for us. But I do also think there’s lots of other products coming along out there that’ll be just as innovative as open banking. And on a more global level.
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