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In honour of International Women’s Day on March 8, The Banker has brought together six female CEOs from the fintech world to discuss the current challenging operating environment and how they plan to expand their business in 2023.

Photos of the panel, including Iana Dimitrova, Marina Goche, Diana Paredes, Catherine Parry, Gabriella Patrick and Uma Rajah.
  • How would you describe the operating environment for fintechs in the past year?

Iana Dimitrova: It has been sobering and refreshing. For many fintech companies, this is their first experience of a restrained venture capitalist [VC] environment. Investors are no longer tripping over themselves to write large cheques for unprofitable start-ups. That has quickly piled a lot of pressure on businesses with high burn rates and short cash runways.

While that’s been challenging for many business leaders, it was also necessary. All participants in the ecosystem – from executives to investors, employees and customers – needed to redefine what success looks like.

The fintech companies that are going to do well this year are those with strong fundamentals and the agility to adapt quickly to changing market conditions. I think we’ll also see a lot of acquisitions and consolidation as firms that haven’t been able to raise new capital are forced to seek an exit earlier than previously anticipated.

Marina Goche: Fintechs in the past year continued to benefit from acceleration in the digitalisation of financial services providing opportunities to deliver new financial products, new infrastructure and innovate with new business models.

Digitalisation of currencies and development of the digital asset market was strongly affected by the liquidation of well-known exchanges. Declining trading volumes have negatively affected the development of those markets.

Continued growth in mobile, internet connected devices and low storage costs has led to the growth in the volume of data produced and consumed worldwide. Artificial intelligence [AI] technologies that provide industrialised data ingestion and insights continued to be developed at pace in 2022.

Diana Paredes: The paradigm shift following the Covid-19 pandemic and acceleration of digitisation within industries around the world had a huge impact on fintech in 2021, with record-breaking investment and VC deals. So, 2021 was a tough year to follow and the slowing economy didn’t help. As with every industry, this caused some challenges for fintech in terms of growth. Even though growth has slowed, the sector continues to thrive relative to others and there are plenty of opportunities to make money in fintech. DealRoom reported that fintech still attracted the most funding in 2022, raising $79bn globally.

Catherine Parry: Both 2020 and 2021 were very challenging for many fintechs given that many financial service firms were tied up with many of their own concerns and unsure of budget allocation. However, the US Securities and Exchange Commission penalties for WhatsApp use in late 2021 and into 2022 has led to a focus on compliance needs and, therefore, budget and resource allocation to fintech/regtech firms which solve these compliance requirements.

Gabrielle Patrick: This is the time for fintechs to blossom and grow, as they are well equipped with agility and driven by innovation. Although global headwinds and recession have created hardships, they have also created fertile ground for fintechs. There has been a fintech refocus, where the strongest have survived. The future seems to be fewer super-unicorns, but more consistent performers. The fintech sector remains one of the fastest growing start-up industries in the world, with increasing smartphone ownership, declining internet costs, expanded network coverage and especially in many emerging markets a young, fast-growing, rapidly urbanising population.

as a fintech, we can be more agile than the large traditional incumbent financial services providers

Uma Rajah

Uma Rajah: Last year was a volatile year for the whole of the financial services industry, from the war in Ukraine, rising interest rates, high inflation, the cost of living crisis, and multiple changes of [UK] prime minister. All of these factors had a big impact on our industry. But as a fintech, one of the advantages we have is that we can be more agile than the large traditional incumbent financial services providers, which makes it easier and quicker for us to adapt to the rapidly changing environment.

  • What were the main challenges you faced in growing your business?

Ms Patrick: Balance is always a challenge in all aspects: people, operations, technology, regulation, commercial operations and stakeholders. Having the right people, customers and backers at the right time in the organisation, who are a balance of integrity, experience, creativity and flexibility, remains a challenge, especially for fast-growing businesses. This is the same for regulators, who need to adapt in a fast-changing environment; their mandate is to encourage real competition but they may have become comfortable with the status quo.

Ms Parry: Undeniably 2022 was tough, with challenges ranging from team morale through to fundraising. However, persistence and the determination of everyone in the team paid off, and I’m delighted to say we are now thriving.

Ms Goche: There was great capacity to accelerate growth in growing markets. The alternative data market grew by $2bn in 2022; spending on environmental, social and governance [ESG] analytics also scaled to $13bn in 2022. These investment analytics markets are core to Sentifi. However, uncertain equity market conditions due to high inflation rates, central bank policy and slowing economic growth worldwide created uncertainty for clients.

Ms Rajah: We actually saw more opportunities than challenges last year, because of our position as a prime property investment platform. We find that times of high volatility and uncertainty can increase the attractiveness and demand for such investment asset classes. This is driven by a number of factors, starting with the focus on prime real estate, which has a reputation for being one of the most resilient sectors in the UK real estate market. Investors are searching for strong risk-adjusted returns that can help them combat the effects of high levels of inflation.

As such, one of our biggest challenges was meeting the huge increase in demand from borrowers and investors. We pride ourselves on our spotless investment performance track record and are confident that our conservative approach to credit risk will continue to support the successful growth of our business.

Ms Paredes: Regtech is 101 enterprise software innovation and it requires people to embrace change. One of the toughest things we face is legacy mentality within the bank, and the missing piece is understanding and implementing modern technologies, while managing the appropriate allocation of existing skills. Regulators are looking for this step change to enable more accurate and less onerous supervision.

Engaging with and hiring the best talent is, and has always been, a priority at Suade. We are keen on bringing in the right people, at the right time of growth, to be part of our exciting journey.

Ms Dimitrova: It’s our vision at OpenPayd to become the leading global banking-as-a-service infrastructure provider. That global reach brings with it a number of challenges as we scale: delivering localised payment services on a global scale, without dropping our high service standards; navigating the fragmented regulatory landscape between different jurisdictions; and building and maintaining strong relationships with our underlying banking partners, across multiple jurisdictions.

  • How did you overcome those challenges?

Ms Rajah: While it is a good problem to have, we needed to adapt to the challenges presented by our large increase in deal flow. For context, in October 2022, CapitalRise reached £200m in prime property loan origination, funding developments worth more than £640m. Of that £200m, we originated £99m in a 12-month period up to June 2022, marking an increase of 252% on loans originated year on year.

In order to respond, we made new hires last year across our lending, marketing, product and investor relations teams: a 22% increase in the number of employees. We are also continuing to heavily invest in technology to enable us to scale faster and improve our customer experience.

Ms Patrick: It’s a continuous journey and process. It’s key to surround yourself with the right people who are skilled, coachable and are of character, a rare and valuable mixture.

Ms Dimitrova: First and foremost, we have overcome these challenges by hiring and developing the best people. We operate in a competitive space which has been flooded with investment in recent years, so the best people are highly sought-after. We take pride in having built an open culture, helping us not only retain talent but also encourages collaboration and innovation. In a time of crisis, the strength of a team is what makes the difference between success and failure.

In a time of crisis, the strength of a team is what makes the difference between success and failure

Iana Dimitrova

Further, the company is ultimately driven by world-class technology and infrastructure. Staying competitive means both investing in our core platform and continuously adding new services and features.

Finally, we focused on the acquisition of revenue-generating customers and making prudent investment in revenue-generating projects only.

Ms Goche: We established new distribution channels for our products, as well as evolved our commercial model from analytics subscription fees to include transaction fee revenue.

Ms Parry: We did this by focusing [on the business], remaining positive and being committed to our end goal of being the ‘home of social media compliance’. This downtime allowed us to build out our technology further, which has proven to be vital for our growth.

Ms Paredes: By being the best product in the market: automation, performance, data harmonisation and the ability to crack regulatory code by harnessing the power of natural language processing set us apart from the legacy vendors that we are replacing, while attracting top talent.

We are bridging the regulatory interpretation gap through various initiatives. Our Regulatory Understanding User Forum, an online platform to encourage debate and conversation within the regulatory space, and regular in-person roundtables in London, New York, Toronto and Amsterdam provides platforms for key players from both regulators and financial institutions to discuss the current regulatory challenges that are at play.

  • What are your plans for 2023?

Ms Paredes: At Suade, one of our pillars is to love our customers. With our platform being used by firms across Europe, North America and Asia-Pacific, we will continue to nurture our current client base, as well as new customers, to give them the stellar support they deserve. We remain bullish on North America, which is a big focus area for us, and we will further invest in our expansion in the region. Finally, as Suade keeps growing, we see the upcoming downturn as a great opportunity to attract top talent from the market. We are very excited to be on track for a high-growth year.

Ms Dimitrova: OpenPayd enables digital businesses to grow by moving and managing value globally, and we will not be deviating from our vision in 2023. That means continuing to focus on developing our platform, expanding our geographic reach and launching new products that we know our clients have a very real need for.

We also have our eyes on new product verticals where we know there is untapped demand for embedded banking and payments infrastructure. And finally, we will continue with our commitment to our people across all of our locations in Turkey, Bulgaria, Malta, the UK and the US to maintain a healthy and safe working environment that stimulates everyone within and outside of work.

Ms Parry: DeepView’s WhatsApp, Telegram and text message solutions are built and working well. We will be adding solutions for iMessage, Microsoft Teams, WeChat, LinkedIn and multiple other channels to ensure our clients are able to archive the platforms they need.

Ms Goche: Our plans are to continue to deliver proprietary real-time investment insights from the broadest and deepest pool of digital chatter that enable clients to outperform standard benchmarks and better manage investment risk. We will also continue to address key financial market problems for both institutional and retail investors, including the need to stay ahead of market rallies and crashes, the lack of transparency around risk in digital assets and the inability to assess ESG performance dynamically.

Ms Rajah: We see this as a year of huge opportunity for the business, given the resilience of the prime property market. The prime central London [PCL] residential market is at a very different place in its property cycle versus the rest of the UK property market. By 2025-7, the cumulative change for both PCL and Greater London is predicted to grow by 11.4%, compared to 8.7% for the UK as a whole.

So, it’s an attractive time for us to be lending, especially at loan-to-value ratios of 63% on average which provide significant downside protection. We’ve also been hiring and have new funding lines to deploy, which will give us additional firepower to meet the continued demand that we anticipate.

Ms Patrick: We’re building a bank to serve underserved markets so we would like to support our customers this year with the services they’ve been asking for. This year is key for business and personal growth in all aspects. We are never too old to learn, but at times we forget we need to adapt or die.

  • What are the biggest benefits of running a fintech business?

Ms Parry: Flexibility and the ability to implement the solutions you know the market needs.

Ms Rajah: Running a rapidly growing business with a flat structure means we can be truly agile. We have the freedom to act on decisions swiftly. We can implement changes and pivot quickly, which means that we can capitalise on opportunities that may not be there for a long period of time.

It’s a privilege to lead by example and have a seat at the table to change the future for the better.

Gabrielle Patrick

Ms Patrick: It’s a privilege to lead by example and have a seat at the table to change the future for the better. Businesses can be profitable and bring value to society at the same time: the two are not mutually exclusive. But in today’s banking sector it appears to be a lost message.

Ms Dimitrova: Running a business is a real privilege and a responsibility. A responsibility to the time, effort and talents of so many people, as well as a responsibility to shareholders’ trust. A privilege to be able to encourage people to grow by learning and picking up new responsibilities. And it’s a privilege to help our clients to solve the real pain points they face around their payments and banking needs. That gives us a north star for everything we do within the company.

Ms Paredes: Being the captain of the ship comes with invigorating responsibilities. No day is the same and I keep learning constantly. I truly believe that the day you stop learning, you die.

The creative process involved with running your own business gives you a real insight in how the world works. I am honoured to lead a company that makes a difference to the economy, and I am proud of the team and the positive impact we have on the financial industry. Finally, I can confirm that when you love what you do, you will never work a day in your life.

Ms Goche: The biggest benefits of leading an AI Fintech 100 and Wealthtech 100 2022 company is the ability to innovate and solve problems that contribute to more informed investment decision-making.

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