Hi Jas! Let’s start with a short introduction and your story. Could you share your experience at Fintech? Why did you start consulting for fintechs and financial services companies?
I’m a fintech lifer. After completing my Computer Science degree, I started my engineering career and worked on a trading desk for a pension fund manager in rapid application development.
Then joined the CitiBank graduate scheme and worked more on the product development and analysis side, moving away from the code writing and pure engineering side.
After five years at Citi, I moved to Schroders to help drive the product development and strategy of some of their critical internal tools. I was then poached by Fidelity to do a similar but broader and senior role, creating a strategy for the product and working with others to drive that strategy forward, creating great solutions for fund managers and traders.
After driving product development & strategy in investment banking, retail banking and asset management, I set up Bitsul to help more organisations build better products faster and share my product strategy and development expertise with a wider audience. And over the past few years, I’ve provided fintech product expertise to various projects at different stages.
From a Saudi Arabian challenger bank build, an Australian digital bank for entrepreneurs & freelancers, a UK-based PFM app, a prestigious UK cashflow management Fintech, a prominent US-based payments issuer/processor, a German KYB fintech and many more.
In my experience, Fintechs and FS companies value proven expertise and the hands-on and tailored approach that helps them accelerate their product development and leaves them with residual knowledge.
It is mentioned on your website: “At Bitsul, our mission is to utilise our expertise to help organisations build unique products customers love!”. What are the top things that customers love today in the financial services industry?
Regarding lovability, customers love FS products that solve problems for them, reduce friction and are often relatable in terms of lifestyle alignment (look and feel, community, purpose etc.).
It’s rare to get all three, and no product is perfect, but it’s in the effort of achieving this trifecta that great, lovable products are made.
There are several great examples of fintechs customers love and that focus on solving a problem. Early Monzo made it easy for customers to load funds and use a card on holiday without any of those costly fees, Wise has made cross-border transfers low-friction for consumers and businesses, and during the pandemic, Starling made it straightforward for SMEs to apply for Covid related loans which drove growth in their SME customer numbers.
The key, therefore, is understanding the problem space and knowing your customer base.
Let’s move to digital banking. It is a growing industry with a lot of challenges. Based on your customer experience, what are the top challenges when launching a digital banking solution?
Building a digital bank has many challenges despite what some will have you believe. Firstly, as mentioned, it’s vital to build to solve a specific problem and bring clear value either by removing some friction or creating a new and innovative solution in the market. This means knowing the market and target customer base in depth and being able to demonstrate clear value.
The next is navigating the regulatory landscape. Obtaining a banking licence is a lengthy and intensive process. Neobanks usually start by applying for an EMI licence directly, but this can also be obtained by using a provider, like Velmie, for example, for core banking services. Knowing how the digital bank will grow over time and what services it will likely offer shapes the regulatory route, so having a clear long-term roadmap is essential here.
What about technology infrastructure? Could you evaluate its role? What factors should organisations consider when selecting software solutions and infrastructure providers?
Establishing an effective and robust tech stack is one of the previous top challenges of building a digital bank. Banking-as-a-Service providers offer many options to outsource key services like KYC, IDV, AML, Core Banking services, Card issuing etc but selecting the right provider that aligns with the values and mission of the organisation and supports the long-term product roadmap can be challenging. There are some industry examples where a tech provider had to be replaced, which then stalled the growth of the product.
Using external providers accelerates the time it takes to build and enter a market which is why BaaS has become vital to fintechs over the past few decades.
In terms of the key evaluation and selection criteria of providers for various services, here are some of the ones I’ve used when working with fintechs and performing vendor selection:
Coverage and robustness of APIs
Available sandbox
Cost per month/transaction vs other
Bespoke startup and growth pricing
Time in the market
Breadth and size of client base
Clear growth and evolution of offering over time
Technical and product proficiency of the supporting sales/pre-sales team
Level of expertise in the given field e.g. Payments, AML, Accounting
Available customer testimonials
High-profile success stories
These are all key in evaluating the suitability of the vendor and establishing how they would fit with the neobank.
Considering the rapid advancements in technology, what emerging trends or technologies do you believe will have the most significant impact on the future of digital banking platforms?
We’ll see more platforms use Open Banking to launch part of their proposition earlier and test receptiveness in the market before building a full-blown banking product. This is because of the lower regulatory threshold that OB products have vs ones that store e-money and have a Visa/Mastercard debit or credit card.
We may also see some BaaS providers move to a subscription-based model for lower value/smaller clients, providing access to their sandbox for initial testing, allowing them to connect to live APIs and then only charging those clients per API Push/Pull request.
Another trend we already see the start of is fintechs like Starling and Wise offer their proprietary technology for others to use.
As customer expectations evolve, how can financial services companies ensure their digital banking platform remains relevant and meets the changing needs of customers over time?
This is a combination of having the right expertise in the organisation who understands market trends, prevailing tailwinds and technological evolution, but also building in customer feedback and research mechanisms so the customers remain connected with the product throughout its lifespan.
This connection with customers is also vital during the design and build phase of the platform as it can take 9-12 months to stand up a product, and even during this time, the needs and problems of customers can change.
In-house & external expert insights, independent research, in-app customer feedback, face-to-face interviews, in-app analytics, and competitor research, all on an ongoing basis, help stay relevant and on the pulse of customer needs. I help structure and often perform this when working for early-stage or scale-up fintechs.
Building customer trust is crucial for the success of a digital banking product. What strategies or initiatives have you seen that effectively address customer concerns and drive adoption?
Transparency is pivotal in building trust with customers generally, but it’s especially important when it comes to financial services products.
It is crucial to give customers a clear understanding of their protection, the risks with certain products, and a clear product fee structure.
Communicating with customers frequently via channels they are comfortable with is also important and goes back to understanding who the customer is. For example, a product aimed at Gen-Z needs a social media presence as this is one channel the demographic uses to ask questions and sometimes get support on issues.
A ‘fast-track’ way of increasing trust and adoption is through partnering with an already trusted established with a coalescing customer base. A public partnership can essentially ‘port’ that trust as there is a halo trust effect that’s seen by customers who have had a long-standing relationship with a trusted brand or product.
Strategic partnerships used in conjunction with transparent and effective communication is a great combo for increasing trust, driving retention and long-term adoption.
How can organisations differentiate themselves in the highly competitive digital banking landscape? Are there any specific areas of innovation or unique value propositions that you recommend focusing on?
Differentiation is vital in this environment as there are so many similar propositions out there.
There are many ways to differentiate. On brand, product, demographic, service or price. A truly innovative and disruptive proposition will use all of the above, but those are few and far between.
In terms of ‘how to differentiate’, it goes back to a core principle.
Do your research (or get someone else to do it for you).
Understanding the landscape, competitors, customers, problems in the space and potential solutions is foundational to creating an innovative proposition.
One way to innovate is to use research to identify a solution to a problem where no solution exists yet. Looking at underserved demographics like the over-65 population, students, or overseas visitors are some areas where there isn’t an abundance of solutions but lots of problems.
Another way to differentiate is to design & build a solution that is similar to current products but targeted at a specific niche. Banking solutions targeted at the Gen-Z population with embedded financial education, for example. Or a current account for the older population that provides guidance and jargon-busting on the growing dictionary of digital terms and processes.
Although there are many neobanks in the market, there are still many opportunities that, with a bit of research and subject matter expertise, can be mapped out and turned into a working product, proving real customer value.
I help companies map out these opportunities, shape the early part of a product, implement tried and tested product principles and help scale products.
Thank you for sharing your expertise!
In conclusion, the world of digital banking and fintech is rapidly evolving, and it presents both opportunities and challenges for organizations aiming to launch innovative financial products. Throughout this interview with Jas Shah, Founder of Bitsul and a Fintech Consultant, we have gained valuable insights into the key aspects of building successful fintech solutions.
At Velmie, we are delighted to collaborate with industry experts like Jas Shah, leveraging our cutting-edge software platform to provide increasingly valuable solutions in the market. We understand that building a successful fintech or digital banking product requires not only innovative technology but also a reliable long-term partner.
Jas Shah is a career Fintech and Product expert. He uses his extensive & hands-on expertise, honed at the likes of Citi, Fidelity and Schroders, to shape Product Development, define Digital & Product Strategy, speed up time to market and scale products for FS, Fintechs and early stage startups. He also shares his Product + Fintech insights in his fortnightly newsletter.