Anthony Thompson is co-founder and chairman of 86 400, Australia’s first smart bank. His impressive resume includes founder and chairman of Atom Bank the UK’s first mobile bank and, Metro bank in the UK, Anthony is one of the world’s leading pioneers in digital banking.
Could you tell us a little bit more about 86 400?
86400 is Australia’s first smart bank built with open banking in mind. The simple premise is the ability for the consumer to pull all of their bank accounts, credit cards, and payment services into one easy app. This allows customers to take full control of their money using data analysis.
What are your thoughts about the future of banking in the era of open banking?
There are a few interesting elements to this. Firstly the pace of development and rhythm at which banks will have to operate. We are lucky enough to have an incredibly strong team of people at 86 400. There is a mix of approximately half engineers and technical people and half traditional bankers. You need that mix of people to gain momentum in a digital bank, which by nature requires a fast rate of technology deployment.
Secondly, the use of an agile framework is essential, especially in a digital-only bank. Everything that underpins open banking should be about the consumer. How do you give the customer a better product/service/experience? The era of open banking should allow us to do that.
Our experience in the UK tells us the big banks think differently about open banking. Banks feel they have nothing to gain and everything to lose, which has resulted in them dragging their heels. The introduction of open banking to its fullest extent in the UK has been hampered by this. We are seeing a similar trend here in Australia. When open banking is fully integrated into Australia, I think it will be good for the consumer. The banks who choose to put the consumer first by using the technology available that underpins open banking should be in a great position.
86400 is a fully licensed bank with mortgage and lending products in your first year. How you have managed to achieve so much in your first 12 months?
We have just over 100 staff in Australia. When we show people around our CBD offices they are impressed that we have a fully functioning multi-product bank operating out of one floor. When COVID-19 hit, we were able to operate the entire bank seamlessly, without a single person working in the office using modern technology. Running a bank remotely three or four years ago would not have been possible.
Cuscal as our founding shareholder for 86400 has put us in an incredibly fortunate position. For those not aware, Cuscal is the largest independent provider of payment services here in Australia. Cuscal has provided us with the capital and resources, which enabled us to get off to a tremendous start. From this, we have been able to assemble a great team and focus on growing the bank without the monumental task of raising capital.
From my own experience of capital raising, which has been about a billion dollars over the last 11 years, it can be a real distraction to the management team. Having the ability to focus purely on the bank, gave us a great advantage in the Australian market.
Many traditional bankers question the neo bank model especially profitability. What are your thoughts?
I passionately believe that profit is a by-product of delivering what the customer wants. By providing a better service and experience for your customers, and managing your business well, you should be profitable.
Profit is very important to businesses. It is essential to pay the people who provide the risk capital. This in turn provides the resources, meaning growth. You can then pay the staff who work in your business. The end goal should always be doing something well for the customer.
The challenge of starting a new bank is that it is capital consumptive. Banks traditionally require lots of capital. Banks seem to more frequently go back to their shareholders with the ‘we’re doing well, we’re growing fast, give us some more money’, something which is different in other businesses. The capital intensive nature of banks has tended to make them a little more difficult than some of the non or lesser regulated FinTech.
Could you share with us your history and how you ended up running not just one, but multiple banks during your career?
My background is in marketing, not banking. Marketing is about looking at data, seeing an opportunity, and seizing that opportunity to develop a business. In 2007 when I first had the idea for Metro Bank I spent a long time carrying out research. The data all pointed to one thing, customers wanted value. The measure of this for High Street banks equated to one thing, Price. When you start digging into the consumers’ response to “value” it meant more than just price. Customers valued service, convenience, trust, and transparency as well as price.
I saw a real opportunity to create a bank focused on all these elements. In 2012 there was another seismic shift in the data I had spent 30 years reviewing. Going digital had truly arrived. People wanted to be completely mobile. This led to the launch of Atom Bank in the UK.
My foray into the Australian market was championed by my wife a few years ago who liked the idea of a move to Australia. Luckily, she intended to come with me, not just pack me off!
I started researching the market and visited from the UK 16 times within 18 months. There was a great opportunity to create a digital bank here in Australia, with all of it’s similarities to the UK. When I met with the Managing Director of Cuscal, he had a very clear vision of what they wanted to achieve. Cuscal had never built a bank and I had been around the block a couple of times before with Metro and Atom. The idea of us working together was a great marriage of our respective skills, experience, and expertise.
What can traditional banks do to regain the trust of customers?
My former partner in Metro bank was once asked a similar question at a conference. He is a well-known face and is recognisable for carrying his little Yorkshire Terrier with him everywhere. The question posed was:
“If we kidnap your dog, and don’t give him back until you restore the trust in ” BIG BANK” (they named a big American bank). What would you do?
He paused for a moment and said “I guess my dog is dead”.
Restoring trust is an incredibly difficult challenge. I co-authored a book on the marketing of money last year, called No Small Change, which looked at the marketing of financial services in general, banks in particular. There was one conundrum we heavily researched which didn’t make sense.
Consumer groups regularly say customers don’t trust the big banks. On the flip side, big banks counter this argument with lots of their research saying customers do trust us. How can this be? One of them has to be wrong.
When we dug deeper (and we enlisted the help of a UCL professor) we found out they were both right. There are two types of trust. Cognitive and Associative. They are broken down as follow:
‘Do I trust my big bank to have the salary that I paid into my account on Thursday still in my account on Monday?’ YES ‘Do I trust my big bank to pay my mortgage by direct debit on the 23rd of the month?’ YES.
These are both cognitive trust, which is based on their competence.
On the other side of the trust scale, we have;
‘Do I trust my big bank, to put my interests first? The resounding answer to this question is ‘No, I bloody don’t’. This is associative trust.
Whilst we trust the competency of big banks we don’t feel they have the best interests of the customer first. The real opportunity for new banks, like 86 400, is for us to demonstrate to our customers that we genuinely do put them first.
Why did you chose 86 400 as a name for the bank?
86 400 is actually the number of seconds in a day. We feel it’s a great because we are all obsessed with helping Australians feel in control of their money, every second of every minute of every day.
When an idea for a business comes to mind I often apply an old marketing trick. Give your business human traits and qualities. I carried out this exercise when I had the idea for Atom Bank. What would the personality of our business look like? I sat at home in Somerset mulling over this question with a glass of wine.
I thought if Atom Bank were a person it would be someone who lives their life digitally. Someone who understands social media, and gets the psyche of our target market ‘the millennial’. I suddenly had this image of Will.I.am. I googled his name and suddenly I had a whole lot of info on him. Whilst his music is the thing he is most known for, he also has a huge AI business, employing hundreds of people across three continents. I was amazed to find out he is a tech entrepreneur.
To cut the story short, I contacted him, he liked the idea. He joined Atom as an advisor to the board and became a shareholder. It turns out we came from similar backgrounds. Hard to believe that Newcastle upon Tyne is like the projects in LA but we did share a lot of similarities. We remain friends, even though I am no longer involved in Atom Bank.
What are your thoughts on Australia as a FinTech hub?
I see several really exciting hubs around the world. Singapore, Shenzhen, California, New York, London, and incredibly the northeast of England. They all have great FinTech hubs. I believe it is more mindset, not geography that is the driving force. When you get young, hard-working, bright, people who are determined to make a success of ideas. Together they become greater than the sum of the parts, over time I believe the work being done on these hubs will be world-changing.
Finally, any plans to go back to the UK, or is Australia home for you?
Well, I think it is a question whether the Australian government would keep me! Certainly, my wife and I love living here, but there are lots of exciting places on the planet.
Gareth Gumbley, CEO of Frollo is behind the quest to help Australians feel good about money. Using the power of technology and community, Frollo enables clients to build their own unique customer journeys and value propositions.
As the first FinTech in Australia to become an accredited data recipient in open banking, Follo is leading the way towards a more transparent financial sector for all Australians.
Could you share more about what Frollo do?
Frollo is a purpose driven FinTech on a quest to help people feel good about money. We’ve built a really simple to implement technology to help businesses, their customers and employees to turn around their finances. We do all this using their own bank data.
Frollo as a business, is essentially two parts. We have a consumer app, with over 110,000 consumers, where we test and learn with our technology. In addition we work with Neo banks, traditional banks, fintechs, lenders, or employers to leverage our b2b SaaS platform and open banking solutions.
This is where they use white label apps or choose to integrate our API’s into their existing mobile apps/lending processes. We help them fast track new solutions to improve people’s financial well being or innovate banking experiences.
Could you tell us about your recent achievements in CDR?
Frollo were the first Australian FinTech to become accredited under the CDR at the unrestricted level. In layman’s terms, this means we can use bank, utility and telco data. On Saturday 27th June 2020 at 5.35pm we officially provided a consumer provided consent which allowed us to collect bank data from one of the big four banks. It felt like being the first FinTech on the moon!
Everybody has been sitting on the sidelines waiting with bated breath for CDR to really get rolling and it was amazing to see it in action. It’s pretty exciting for the team to finally get there. There has been a tremendous effort with ACCC and Data 61 to navigate rules and standards to get us to where we are today, it’s been a phenomenal journey.
It is pretty critical in the process to make sure we uphold to protect consumer data above all else. A lot of time and energy has gone into making sure that the app is adhering to ACCC standards. This includes the screens and the language we use to get consent, making sure the consumer is aware of what they are agreeing to. Once the data is inside our environment we needed to make sure it was safe. From here we can then gain insights and give the consumer a better picture of their finances. The new app is now live and consumers will see the immediate benefit.
What do you see as the opportunities for Frollo as CDR goes live?
We’ve been working in the space of helping consumers feel good about money for the last three years. Frollo has three key journeys we want to take our consumers on. Firstly, helping people identify ways they can save their money. The second is to debt reduction, especially in today’s credit driven society. Lastly, purely a case of tracking our expenses so we can become more literate in managing our daily money.
The beauty of CDR is being able to link product API data with consumer transaction data. We’re able to see how they’re using the financial products and whether it’s best suited for them, or whether there are better deals out there.
How did you get the idea for Frollo?
With 15 years working in payments and consumer finance, I’m an old dog in the land of FinTech. I became interested in understanding how consumers manage their finances, including moving money and making payments. I felt there was an opportunity to help people borrow money in a better way. Whilst lending people money to fix an unforeseen problem, like a broken down car, might seem like a solution in the short term, it is really just a quick fix. It doesn’t go to the heart of the problem. We need to engage people in their finances earlier.
There was nothing there, like a Fitbit or Strava for finance to help people understand ways they could be in a better financial position. PSD2 was on the radar, open banking was a conversation, the whole world of digital payments was happening, but there was nothing that really filled the void.
I just sat there one day back in 2015, with a piece of paper at the dining room table and thought there has to be a better way of doing this. There has to be a more fun way of getting people engaged in finances. Frollo was born out of this.
Could you give me a snapshot of Frollo today, and what are the plans for next few years?
We’ve got just over 30 people in the business made up of developers, product management, sales and data scientists. Data is probably the biggest skill set explosion in our team. The business is consistently growing our revenues year on year for the last three years, over 300% revenue growth in the last couple of years. Frollo was initially self-funded. Since then we’ve completed three small, private funding rounds.
Our focus for now is Australia, but we are constantly exploring partnership opportunities to open up new markets. Our current partnerships include Virgin Money and Volt Bank. We are noticing an increasing number of Neo lenders, Tier 2 banks and some FinTechs are starting to engage our services. I feel our success is partly down to bringing capital in from people we like and know. We are focused on building a business that is sustainable for the long haul.
What is your approach to the culture you’re building at Frollo?
I was fortunate to have had the opportunity to run a number of other small businesses that accelerated and scaled really quickly. The benefit being I could decide what was important when I designed my blueprint for Frollo.
One of the key things was making sure the business had a really strong purpose. Being clear about what were we trying to achieve. Authenticity in how we engage and interact with staff and our partners. So, everyone who meets Frollo believes we’re purpose driven, we care and we want to make a difference.
Frollo as a business is very innovative and passionate, this plays a big part in helping attract talent. We were lucky to onboard high performing talent with energy who we already knew. They set the benchmark and in turn brought their friends and their friends brought their friends. We’ve really done pretty well at bringing together a nucleus of staff who helped build a solid culture. We’ve managed to maintain this as we’ve grown and navigated Covid.
We’ve been fortunate to hire some incredible software developers. We’ve got 15 or 16 nationalities across our staff of thirty. Our willingness to onboard an app developer who worked on the number one app in Nepal, absolutely gives them the credibility to be working on an app in Australia. I guess the enthusiasm to bring talent in and bring good people in, has enabled us to build a pretty high performing team.
What are your tips to find other ways of bringing in good people when the market is constantly decrying “there is no talent”?
Be brave and have courage in both the people you’re hiring and yourself. We took a risk by taking people who had experience in other markets, but not in Australia. We looked for people in other disciplines or industries and see if they were able to apply their skills to our organisation. Our part was to provide the coaching, support, onboarding and nurturing. We gave them time to come up to speed, which is not something companies give these days. Our patience paid off and we started to see the benefits our teams really flourished.
What does the next 12 months look like for Frollo?
Our focus is going to be helping other organisations develop use cases around CDR. We’ve purposely built our apps and our API’s to enable others to fast track on to CDR. You can apply to become an ADR today and then immediately outsource most of the technical and process capabilities and components to Frollo.
We can really accelerate the number of organisations that get accredited in ADR and are able to leverage CDR data. This is really where we want to see our focus over the next 12 months.
How do you think the average consumer will benefit from CDR?
We’re hoping our consumer app will enables us to prove out those use cases to show ACCC, Government and industry there are ways and opportunities to help consumers. They may never know they’re using CDR or open banking, but what they do know is there is a better way of looking after, moving their money and a better way to experience financial products. They’re just not aware they could be on better deals or products more suited to their lifestyle. There’s a tremendous opportunity to build financial literacy and well being. If we know where our money goes, how much we’ve got and that we’ve got enough to pay the bills it considerably eases our stress levels.
How quickly do you think we’ll see the interaction with CDR here is Australia?
I think we’ll continue to enjoy CDR and the benefits it brings. I think all of us are frustrated its not quite moving fast enough. The UK is a good example. They witnessed a tenfold increase in the number of API requests over the last 12 months. These things take time to build out, it’s incredibly complex but I think the next few months will be exciting. Then we’ll start to see innovations really come into the market as we go into 2021.
Often the “Fin” in Fintech would denote a heavy hitter from a bank being a winning hire, right?
In the fast paced environment of Fintech, we have noticed caution on the part of our clients in making such a decision.
The hesitation is bound in stereotypes. Banking is often viewed as a mired in red-tape, compliance (or lack of, in Australia), too many chiefs, too many meetings and nothing getting done. Huge amounts of resources and dollars are thrown at projects that never come to fruition. Whilst their Fintech competitors move with stealth and agility, innovating at much greater speed with minimal resources.
The role of an Executive Search Consultant is to challenge stereotypes and get clients to view each candidate on their merits. The view of not being a team player and rolling up your sleeves is often a misconception in banking, but there are plenty who refuse to conform to the stereotype of a banker.
Tier One People is bolstering our position as the leading Australian Fintech Executive Search firm. Australia’s growing FinTech sector has seen a rise in the search for C-suite and leadership talent. Counting Revolut, TrueLayer, 10x, Klarna and Transferwise as some of the many companies seeking our assistance.
How bankers can take control of their job search.
A more proactive approach job seekers can take is to look at where your big banking skills can have an impact. Assessing whether a company is at start-up or scale up stage will also aid you in making a successful move to Fintech. Read this article on Fintech Career Advice to gain a better understanding at which stage of growth you are best suited to.
Before embarking on the search it is crucial to take a step back and ask yourself;
“How would I cope moving from a structured and heavily supported environment to a one of a specialist generalist”
The best advice we can give candidates looking to join a Fintech.
Showcasing your skills in 2020 also requires more savvy than ever before. Looking good on paper doesn’t get cut through anymore. If you are in the market looking to join a Fintech you need to have a plan in place and a goal in sight. You need to utilise all of the tools available, LinkedIn, Facebook, Twitter, YouTube, Podcasts. These are all channels where you get direct access to decision makers, people who can hire you.
You can showcase your skills and achievements, bringing them to life and not being blocked by gatekeepers and recruiters.
Do FinTech Need Banking Experience?
Dexter Cousins, the CEO and Founder of Tier One People, has interviewed more than 300 FinTech leaders on the subject of hiring. He firmly believes hirers should consider the lifecycle of a Fintech to assess where the best candidate fit is.
It’s very difficult for anyone to move from a corporate job to an early stage startup. But with the rapid growth of tech companies, a startup can become an enterprise in 5 years. Examples include Stripe, Revolut and Australia’s Afterpay.
It’s a difficult process identifying the right time for a banker to join a Fintech. The right person can definitely make a significant contribution as the company scales. Often times the right hire is made but at the wrong time, which ultimately means the hire is wrong.
Find out just what skills you need in this exclusive interview with Eric Wilson, CEO of neo Bank Xinja.
We get inundated with calls on a daily basis from candidates seeking a move to the shiny new world of ‘FinTech’. However, opening your pitch with “hey, I’ve got 20 years experience in banking, I want to work in FinTech” might not be the best way to impress people.
It’s also important to make the distinction between a Finance business and a Software business. Are bankers better suited to a NeoBank or a platform provider. Fintech covers a wide range of businesses and making this distinction can really increase your chances of securing a move.
Judo Bank, Xinja, 86 400 and Revolut in Australia have all hired highly experienced bankers early in their growth. Judo and Xinja are both founded by highly experienced bankers who were driven to change the industry.
FinTech’s are at the cutting edge of innovation with far fewer resources than any bank. The reality is no founder or investor gets excited by somebody with twenty years experience in banking, unless they can demonstrate previous success in a startup and they have skills currently not in the business which are mission critical to success.
When Founders need help with hiring.
The recruitment process to join a Fintech can be almost as intense as the job itself. If you can’t handle the intensity of the interview process, it’s highly unlikely you will succeed in the job.
The thing to remember is that FinTech founders themselves may not have the breadth of experience in HR or Talent to make critical hiring decisions. Hiring for a startup is often a make or break decision. We’ve watched some companies flourish and others flounder because of it.
For a founder looking to hire, specialist FinTech recruiters are more easily able to identify those candidates who are the ”right cultural fit.” Assessing if someone will relish the challenge of working in a FinTech environment is very difficult using traditional interview techniques. And a specialist recruiter can provide far greater access to Talent than an ad campaign and direct networks, especially in talent short markets.
But to achieve these results a client needs to invite us ‘into the tent’.
The key to success is communication
Being attuned to the changing demands of the business is vital to ensure success when hiring.
“The Revolut Country CEO search took six months. The brief changed 4 times as the company grew from 700 staff to almost 2000 during this time. Customer numbers went from 4m to almost 10m. When a company is growing that fast in a highly regulated sector like Fintech, it creates a lot of complexity. Hiring becomes even more complex.” commented Dexter Cousins.
There is a need for the modern executive search consultant to set realistic expectations with their clients. Being transparent and honest (even though clients may not want to hear what you have to say) is the only way to achieve lasting success. This approach is core to the values at Tier One People. The search for the “blue eyed unicorn” is never a realistic one and usually wastes significant time and business opportunities.