With one week to go until the London Summit, AltFi’s Emily Nicolle speaks to Shachar Bialick on PSD2, big tech and finding your niche.
On March 26th, we will be hosting over 60 speakers from across the global fintech community as part of our fifth annual AltFi London Summit, now in an all-new venue at 155 Bishopsgate. Ahead of appearing on our Making the Marketplace roundtable alongside some fintech favourites, Curve CEO Shachar Bialick sat down with us to give us a deeper insight into Curve and how he sees the future of fintech.
The idea for Curve came to Bialick back in 2006, before he started working on start-ups. Now as his fifth entrepreneurial endeavour, Curve aims to simplify a user’s financial life by connecting their bank accounts to one smart card and one banking app. Users can spend from any of their debit or credit accounts via their Curve debit card, and manage their finances from within the Curve app with useful features such as instant notifications and the ability to “turn back time” on purchases.
“Being an employee is not something I’m good at,” said Bialick. “I’m better at building companies.” This statement is all the more apparent when you take into account Curve’s success: the firm saw more than 100,000 people sign up during its beta phase, spending over £100m in 100+ countries.
Bialick cites the fragmented world of money as his initial inspiration for Curve, which is something that becomes evident as you age and grow more financially independent. “As you grow older, you accrue more financial debt,” Bialick explains. “Not just owing people money, but debt in terms of the amount of services and products you use and the money you lose through owning them [in fees].”
“This is where we feel that you don’t really know what’s going on with your money, you just can’t see it.”
“Back in 2006, the idea was a no-go. Facebook had virtual currencies, PayPal were trying to get from online to offline… But after spending a year working in a company in 2014, I realised I’d learned enough about payments and it was time to solve this pain point.”
The emergence of the Payment Services Directives (1 and 2, in 2007 and 2015 respectively), and more recently the launch of Open Banking, has also been a major turning point in aiding fintechs like Curve to demystify money by making data and information about financial behaviours more readily available.
Many in the fintech space have chosen to utilise this opportunity by beating out the big banks, with firms like Monzo, Starling Bank and Revolut all fighting towards creating the best bank possible for their users. But is this the best way to provide a better use case for financial understanding?
Take a look at the music industry: “You start with CDs, tapes, vinyls; you have them all over your house, or you have to carry them with you. Not so convenient. Then the aggregators come along, like Napster, Deezer and Grooveshark, and then eventually the emergence of category king: Spotify. One aggregation layer, or experience layer, from which you can listen to favourites and discover new music.
“We believe the same thing will happen with money. It’s not the solution of coming out on top, but about connecting all services together. Now we’re in the position where we can connect the world of money into one beautiful layer, and then deliver this beautiful layer to our users.”
Eventually, Curve will also be able to begin making financial recommendations based on your entire spending behaviour. By the end of 2018, Bialick hopes to have launched a functionality for providing credit lines, connecting Curve's users to the right providers based on their individual data.
But becoming a bank is something Curve is never going to be interested in, preferring to profile itself as a pure technology company that just happens to work in finance. Currently Curve outsources some things, like its card services provided by GPS (a firm known for its temperamental outages), but Bialick hopes to bring all tech in-house with time.
“It’s just a matter of prioritisation: our priority is to build our operating system, and to give you the best experience you can have with your money. Then to grow the user base, and then to move into efficiency. But reliability of product is number one.”
“Building our own tech doesn’t eliminate competition. There will always be smarter, faster, better companies. But it does give us a two-year head start on everyone else.”
In a similar vein as to why aggregation is the way forward, Bialick also said previously in an interview a few years ago that he didn’t expect digital banks to ever reach profitability, given the competition they’re going up against. I pointed out the recent advances of Revolut on breaking even and surpassing 1.5m users, however his response was largely unchanged:
“Revolut did a good job acquiring a lot of users, but there’s a difference between acquired and active users. It makes sense that they’ve been able to do it, because they’re selling a dollar for 80 cents. They’re providing you with a significantly cheaper experience than anyone else.
“But my comment is that will Revolut ever become my focal point of access for my money? Would Revolut become the only product I’m using every day for everything money? And my answer is still no. They won’t be able to do that unless they can change their product expectation from an FX card to something else.”
So, some fodder has been added to the fire for when Bialick sits across from Revolut at our Marketplace roundtable next week. You can check out the full line-up of speakers attending the Summit here, and make sure to register for tickets before Friday's deadline here.