BEAST Magazine #1 2015

8
#Business | FinTech
DON GINSEL & NASIR ZUBAIRI
UNDERSTANDING FINTECH
BY MICHAËL RENOTTE & ALEXANDRE KEILMANN
HOW TO BUILD YOUR OWN FINTECH STARTUP:
A PRACTICAL GUIDE TO TRANSFORMING
THE BANKING INDUSTRY
A practical guide to transforming the banking industry
FinTech is without a doubt the hottest ingredient
in the seething caldron of the finance and banking
sector. Disruptive models and solutions are currently
reshaping an industry which was seen by many as very
conservative. Where does this new set of trends come
from? Consumer habits have changed over the last 10
years thanks to new technologies and the exponential
development of a thing called The Internet. Mobile has
also become an important asset for the banking industry:
$2.3B have been invested worldwide and more than 470
mobile-first startups founded since 2010. BEAST met
with Don Ginsel from Holland FinTech and Nasir Zubairi,
Venture Partner at FinLeap, to understand the creation
process of a FinTech startup.
When he joined the financial industry, Don Ginsel, who
had a background in engineering, was struck by the lack
of innovation due to the large number of processes to
follow. He therefore focused on how he could bring the
technology to the banking sector to “change the core
banking industry”. Tools were not necessarily available
then…but FinTech startups were beginning to develop and
Don soon realized that these startups were going to be
the ones changing the world we live in. Nasir Zubairi can
only agree: “I think that FinTech can solve the problem
around credit and address the issue of underbanking
in developing countries: as a matter of fact, around 3
billion people do not have access to the banking system”.
He adds: “FinTech is about dividing the value chain of
financial services, creating better services and turning
providers into much more efficient ones, just like we
have seen in other industries, like Telco”.
The success of a FinTech startup notably depends on its
collaboration with banks and the understanding of the
current legal framework. According to Zubairi, creating
a FinTech startup is a “combination of good strategy
and good execution”. Understanding the market is key,
but what’s even more important is to understand the
customers and their needs, and demands. In this respect,
one of the most important steps for a FinTech startup to
skyrocket is the validation of the test customer market
within a short period of time. Results need to be scalable
from the first days of test. While Don Ginsel is located
in Holland, Zubairi chose Berlin. One must also think of
London as one of the key FinTech enablers and of course
Luxembourg, which has been home to many successful
FinTech companies such as Digicash, FLASHiZ or Yapital.
Ginsel says:
“A NEW FINTECH COMPANY SHOULD BE SETTLED
IN AN ENVIRONMENT IN WHICH MULTIPLE
FINTECH COMPANIES ARE ALREADY OPERATING
WHO HAVE DEVELOPED A HIGH SKILLED
LABOR FORCE”
Plus, competition drives quality for companies and
a wholesome ecosystem is more enticing to venture
capitalists, potential customers and talents than an
isolated company.
What better place to nurse a FinTech startup
than Luxembourg?
In Luxembourg, startups, banks and the government are
all on the same page when it comes to developing a strong
FinTech ecosystem, the best example being the launch,
in October 2014, of the Digital Lëtzebuerg initiative, which
aims to prepare companies and the entire local economy
for the digital transformation. The country launched
massive investments in tech infrastructures: half a billion
was spent on ultra-high speed network, international
connectivity and top tier data centers over the past five
years. With its proactive strategy of digital transformation,
the government put innovation in financial services on
top of its priority list. Government and industry experts
work together in dedicated committees to discuss how
to make the country more attractive to innovative high
tech and financial companies, and improve the regulatory
framework.
In addition to state-of-the-art infrastructures and a
friendly business environment, the Luxembourg financial
center is recognized for its excellence in asset and wealth
management, cross-border transactions and global
fund distribution. This financial excellence that serves
an international clientele would benefit from high tech
entrepreneurs to become more customer-centric and
develop innovative solutions in data processing, analytics
and cybersecurity to name a few. There is a huge pool
of financial institutions ready to invest. To facilitate the
development of such companies, Luxembourg has many
incubators and accelerators that support innovative
businesses by providing them with active guidance,
along with IT providers and law firms.
BEAST MAGAZINE #1