EXCLUSIVE: "Rethinking the Route" - Luc Gueriane, Moorwand in 'The Paytech Magazine'

Disruptive fintechs, by definition, will often rub up against the system. But they don’t always have to pick a fight with legacy, says Luc Gueriane, CEO of Moorwand

The last few years have marked a turning point for fintech – what might once have been considered blue-sky innovation is now thought of as mainstream.

Nevertheless, some promising ideas have failed to become lasting businesses. Why is that?

What makes a sustainable fintech

The sustainable fintechs, in my view, are the ones that clearly define what they have that’s unique and powerful: something that others can’t build themselves, can’t build quickly enough or would involve them having to partner with organisations that they view as competitors. That must all be underpinned by the business having a strong focus on their target users, and, notably, understanding what valuable features and benefits they can offer through their solution.

Fundamental to any fintech innovation is that they are able to bring that solution to life without having to build out the end-to-end ecosystem within which their solution operates. This concept is not always as easy to determine, let alone implement in practice, due to the complex interdependencies that are characteristic of the industry.

It’s also important for fintechs to accept that they can’t replace everything – and those that try to will struggle. There are always going to be legacy systems. They’re not all necessarily causing pain to an organisation and they don’t need ripping out immediately in favour of a new implementation.

Fintechs must unravel this ecosystem: identify the burning platforms for change, the systems that can be left in place, and find a way to integrate them. Otherwise, they’ll come to the end of their runway long before they can create a sustainable business.

Comfortable with edge cases

So, this is where Moorwand comes in. We’ve been around since the early days of fintech and we’re comfortable working with edge cases – bold innovation to improve payment flows that might, on the surface, look difficult to bring to market.

If there’s a legitimate business case to be made for us supporting a particular type of product or use case, if we think it’s adding something valuable to the ecosystem, we’ll throw our hat in the ring. As a result, we’re proud to have developed a complex and diverse range of solutions that cater for a broad variety of specific requirements.

This, in turn, creates a unique hub that allows each client to be connected with the best fit for a multitude of the core components that are needed to bring their vision to life. That includes finding the most strategic approach to use as much existing infrastructure as possible so they can focus efforts on their key innovations.

Regulation without the distraction

The above is particularly relevant in terms of Moorwand bringing robust, experienced and scalable regulatory support. It’s an area that many fintechs would find an enormous distraction from their primary expertise, and one where there are noteworthy risks if they were unable to build up adequate expertise or resource to maintain pace with their core business.

Many innovative fintechs are not always clear on how they fit within a regulatory framework, which means they could see goal posts move in time, in different scenarios or geographical markets. This further supports the business case for them to partner with more established and tested parts of the ecosystem (that they sit within and understand are not competitors).

What we see on a regular basis is that it’s not always economically viable to implement a rule that has been designed for a big bank. In that case, we have to understand how to work to the spirit of the regulation in a way that can be demonstrated and audited and fulfils what the regulators set out to achieve.

We’ve seen this particularly in open banking, cross-border payments and APP fraud rules, when, during the consultation period, there’s probably not been a coherent message coming from fintechs. Often it’s left to the incumbent players to validate the regulators’ intentions and only then do we see solutions appearing from fintechs.

A problem shared

We’ve built out a network of partners over the years who can help us interpret the rules so we can help businesses bring their solutions to the market safely.

One thing we know for sure from working with so many solution providers to multiple payment processors and banks, is that if something’s a problem for one, it’s going to be a problem for others in similar situations. Moorwand will work with our peers in the industry, our clients and the most innovative fintechs to find that next niche solution. We won’t leave them dealing with a problem on their own.