Interview: Krzysztof Pulkiewicz – bankUP
Read interview with Krzysztof Pulkiewicz – CEO at bankUP, SME Fintech Bank.
Olena Gryniuk: Tell us everything about BankUP! You are quite young, aren’t you? Have you launched already? Tell us what is BankUP and how it is different from traditional banks and other fintechs?
Krzysztof Pulkiewicz: BankUP is smart fintech bank for small and medium business. Our goal is to offer small and medium businesses the set of tools combining traditional banking products like a current account, Mastercard together with fintech services to give them the ability to use these services in one single place. This is Bank UP, and we are targeting SMEs around the European Union.
OG: Have you launched already and in which countries?
KP: At this moment, we are in a beta phase in request an invite only. We are launching in Q3 2017 in Belgium, the Netherlands, and Poland – our home markets. Then we are targeting some other EU markets – Spain and the UK are also on the roadmap.
OG: How do you find competition on these markets? Whom do you consider as your competitor?
KP: We can split the competitors into three different groups: we have big market gorillas – well-established banks with big portfolios, and we have some banks which are considered as innovative specifically in SME space, and we have fintechs which are ambitious and are providing a fresh breeze for the market. We are in the third group, definitely. And we believe we have a space for our services and we have very detailed customer acquisition target and strategy for that. Regarding fintech, there are at least five-six oriented banks I know in the UK which are starting now; there are four banks in Germany which are also targeting SMEs. Definitely, we’ll be the first fintech bank in Poland and one of the few in the European Union with EU-wide offering.
OG: What will be your unique competitive advantage?
KP: We have three major advantages: the first one is we are focused on the teams and not on a single account owner, but we are focused on helping those SMEs to collaborate with team member, employees, accountants, just to save time, just to make it really fast and avoid unnecessary work on daily basis. That’s the first one – we are about the collaboration. Second and the core element what we do and the core element of the Platform is what we call smart analytics. We have machine learning engine; we have a lot of algorithms we designed and deployed which are looking at your data on a daily basis and provide you with assistance and some recommendations, for example, about your financial liquidity. We are not just visualizing what is happening with your business, we also help you to understand what is the risk of losing liquidity in the nearest or longer time horizon, we also help you to use the products that actually will help you like factoring, invoice discounting or credits. So the role of the assistant is to be smart, to be insightful, and the third, and also very important, is to be personal, which means that we are asking our users few questions about their business model, the industry they come from and then we are personalizing, customizing the functionalities, we are customizing the user interface to deliver the relevant functions in scope and in the context of what they do and what the business is.
OG: So, you are saying you are a like platform or hub for SME customers with a set of products. Which products do you have already on your platform? Which ones are yours, developed by you? And which ones are integrated from the third parties?
KP: We are partnering with SolarisBank, which provides us with basic products like current business account, Mastercard Business very soon will be available as well. We also have some products related to cash flow management, and we are integrating with providers of SME lending, SME factoring, investment products are also on the roadmap for 2017. Our goal is to build a platform where we give a choice to the customer: how do I want to transfer my money, how do I want to collect my money, we have two partners who are providing POS equipment and services there, how do I invest my money – everything on one single platform with the really best class user experience.
OG: What will be your business model? How will you earn?
KP: First of all, it will be transparent. We well be charging user in very simple approach. We have a monthly fee which covers basic financial products together with valued added services. If you are using more services, for example, you are aggregating more accounts from other banks, you will pay a little bit more, there is an incremental price on top of it. We are also working on, it’s not yet available now, on the premium plan, where you will have more services included with a flat monthly fee. Some services will be available for free forever, so it’s not just a trial period, we’ll provide some services for free for our users that will register on the Platform.
OG: Let’s assume that I’m an entrepreneur in Belgium and I would like to open an account with you. What is the process of onboarding, which documents are needed from my side and how much will I pay if I have ten transactions a month?
KP: The onboarding process is fully digital. You can do it from your home, even 10 PM, whenever you want. It depends on what kind of business you are. If you are a sole trader, you will go with few questions on our onboarding process, tell us something about your business, give us your Tax ID, then we will invite you for very simple video KYC process: you need to show us your ID to someone who is sitting behind, it’s like a Skype call, and two-three minutes later we will open the account for you, and you can start using your service. Immediately after we will also issue the card which will be delivered via post within three working days. That’s the process. From entering our website till having an account that you can use and make a transfer it’s just a matter of a couple of minutes. If you are a bigger business, the process is a little more complex, because we need to check your company, who is a legal representative or beneficiary owners, but still this is fully digital process: you will upload the document available in public register, our partner will check this document, we’ll invite one or two, depends on your legal structure, people for KYC process and again within a couple of minutes you will have your account open for business purposes.
OG: Available currency now is EUR only?
KP: At this moment, it’s EUR. We are targeting Q3 with Polish Zloty as well. Next on the roadmap is pound sterling, but not this year.
OG: So, how much do I pay for it?
KP: Once you have registered to the Platform, you have a choice not to open a current account even so that you can use some of the fintech services for free. Then we’ll try to convince you to open a banking account with us. You will pay depends on a market, but it’s something around 7-8 EUR a month for a full package. So, you will have basic services, you will have Mastercard, but also you will have some value-added services like account aggregation, cash flow management, expense management, everything included into the package. No surprises, no hidden fees, everything with a single monthly fee.
OG: Are you web-based bank and are you gonna be mobile?
KP: We are both. First of all, we have a web application, which works fine on your laptop, iPad, even on your phones, so it’s fully responsive. And we have a Mobile App. But when we designed a mobile app we didn’t just copy the functionality of the web to the mobile. Because we treat mobile device as your personal business assistant. So we will send you notifications, we will allow you to make some actions, some decisions just on your mobile phone, look at your key KPIs, look at your daily financial agenda and then once you would like to do some planning, look at your financial liquidity I still believe that web browser on your laptop will be much easier, much faster.
So, we are not just focusing on your mobile, our primary channel is still web and mobile plays a very specific role of your personal assistance, and it helps you when you on-the-go. But if you want to plan, if you want to manage your finances, if you want to issue an invoice, I still believe it’s much more comfortable to do it online with your laptop rather than your mobile phone.
KP: As I said, in Q3 we’ll be starting in three different markets. We have around 150 beta-testing companies. And we have a queue of different companies which already ask us to be invited for the next beta phase. What is also important we are not just targeting micro businesses, sole traders or freelancers. The main value we are delivering it’s for the team of five – ten – fifteen people working together as a company, where they can collaborate, where they can manage their personal and project budget, this is not just a retail plus application for freelancers, it’s really something that helps small companies to manage how they collaborate, how they are managing their finances, personal project expenses, everything in one single place.
OG: What is your technical part of your bank, are you cloud-based Platform?
KP: Yes, we are cloud-based, we decided to go fully with Microsoft Azure Cloud. We are using it to build a scalable and secure bank. We are also using some more advanced mechanisms, for example, our smart data engine is based on Cortana Machine learning engine, we are using it to understand your transactional data, to understand other information we can grab about your business and provide you with really insightful view and some recommendations on it. So, we are fully based on Cloud. When we are working with banks there are scenarios that we can also deploy on premise, but bankUP as a service, bankUP as a bank is fully based on Windows Azure Cloud.
OG: Coming back to the banking license: do you plan to get your own in the future?
KP: Never say never. At this moment, not. We do not plan it. We have a great partner, which is SolarisBank, which actually takes a little bit out of us some of the regulations, some of the compliance elements, which allows us to be really focused on great product, on good technology, on rather providing a business value proposition for SMEs. If we expand the business to other countries – maybe, but at this moment for 2017 and I believe for 2018 – we don’t have such a plan. And we are really glad to work with a partner that’s Solaris. We started almost the same time. They started with their banking license, and we started looking for how we can disrupt SME banking, so I think we are building great combination there.
OG: BankUP is registered in Belgium? Why Belgium and who are the investors?
KP: Actually, we don’t have any investor yet. We are just co-founding it with a partner. And why in Belgium: because we are a team of Belgium colleagues, which are based in Kontich near Antwerp, and we have a team in Poland. So we are working together. Team in Belgium is more business oriented, this is a team of ex-consultants specializing in digital business. In Poland, we have team which is focused on a product, IT and analytics. We also started after Finovate we started to look more actively for a precarious investor.
OG: How many people your team counts at the moment, both in Belgium and Poland?
KP: We have a pool of people in Belgium as our founding partner is Hedera Consulting, which is a team of around 50 consultants which are working on different projects. So, we have a pool of really smart people that are helping us. In Poland we have 12-15, we are growing extremely fast, sometimes I don’t know if I’ll be back to the office and there is still a place for me there ?
OG: You presented at Finovate that one of your distribution strategy will be direct to banks as a platform. Is it right? Are you ready to integrate with traditional banks and on which services?
KP: Yes, it is. We are focused on as a platform, so our ambition is to have the best SME digital banking platform on the market. And we are using this platform in two different ways. We are building bankUP as our brand when we will be delivering business banking services for EU SMEs, but at the same time, we are opened to discuss and to work with existing banks, how we can help them to differentiate their offering for their SME customers. So it’s another use case of the platform that we designed, and we are implementing. If we are ready – yes, because, by the design the platform is enterprise-ready, we have an experience, I’m IT architect from my background, we have an experience how to build applications which are scalable, which provides the proper level of security, how to integrate this with core banking systems, so yes, we are ready, we are already in the process of working with the banks.
OG: Krzysztof, tell us a little bit about you. What is your path in bankUP? What is your role in bankUP? Is this your first fintech bank?
KP: Yes, this is my first fintech bank, but not my first fintech company. I’m CEO, and I’m one of the Directors of bankUP together with my colleague Philip Lahey. My role is related to building the operational model, building a model where we are teaming up with Solaris, where we are integrating with different fintech partners, go to market strategy. That’s my role. My background: I’m IT architect, engineer. I spent a couple of years working for Accenture, for financial sector projects, different implementations. I was Chief Security Officer for AXA in CEE region for a while. And then I started two fintech companies. One company is specialized in operational risk management and business continuity; we developed a platform which is used by the banks as well. And then I was also involved in a BFM implementation when we were working with the banks as well.
OG: What are your the most difficult challenges at bankUP at the moment?
KP: There are few challenges: the first one is, and I think it’s not surprising, it’s to build a proper customer acquisition model. We know that SME market is underserved, but at the same time, it’s not easy to convince SME customer to switch to another bank. We are working on a very new and innovative model how we will attract SME customers, and we are focusing on a micro segment, so we want to be a partner for companies where we understand their business. We have a very dedicated value proposition for real estates, for retailers, for technology companies, for lawyers. And for each of these sectors we have people which understand their industry, they’re in these industries for a couple of years, and they help us to build a value proposition and evangelize how SME banking can look like for these particular groups of SMEs. That’s one of the things. Second, obviously, is compliance. Even if we don’t have our own full banking license, there are a lot of compliance rules that we need to fulfill, including security, data protection. And the third one is to build a win-win solution for our fintech partners. To build a scale and to provide a value which is great for our SME customers.
OG: What will be your main marketing channel for customer acquisition?
KP: Two marketing channels: the first one is online and the second is via our champions. As I said before we have those people, who are specializing particularly in a micro segment of SMEs and those people are telling us: this is the event that we should go, where we can present how bankUP can help those SMEs within their particular needs. There is an online magazine where you can advertise, and our goal is to do it really contextual and really speak the same language with our SME customers. That’s one of the channels. It can be both online and offline. We are working on this approach.
OG: Do you have an aggressive target for customer acquisition till the end of this year? Will it be 1000 or 10000 customers? How many do you plan to acquire?
KP: Yes, I think it’s more than one thousand customers for sure this year, but it’s less than ten thousand. The plan is aggressive, but at the same time, it is quite realistic. We know that first 100-200 customers with which we are already working which are based on relations, friends, family. But now we are implementing full customer acquisition strategy with full marketing approach, and this should provide the results which are a little bit above 1000 customers as you said.
Photos: bankUP, Krzysztof Pulkiewicz
Olena Gryniuk: Regional Manager for CEE at SME Banking Club, with SME banking background and experience in SBB Product&Development. Follow Olena in LinkedIn