As you may have noticed, in the last few weeks we look closer to the cooperation between traditional financial institutions (i.e. banks) and fintechs as this seems to become a trend worldwide. As we try to get into the heart of the matter, sum, and substance, we bring you a mini-series of interviews about this topic.
One of the banks that pulled the trigger as first in this area in the CEE region was Czech Komerční banka that through its subsidiary KB SmartSolutions makes investments into financial and technological start-ups, i.e. fintechs, and creates an ecosystem of partnerships between these two worlds. We are interested in how such partnerships happen, what works well, and what could have been done differently. So as we would like to know where is this heading and how current products and services could be improved.
We have already brought you an interview with Patrik Nový, Director of KB SmartSolutions, and Petr Volný, Co-founder and CTO of Upvest.cz being the historically first equity entry of KB SmartSolutions. Today you can immerse in reading the interview with Adam Šoukal, CEO and Founder of Platební Instituce Roger.
Responsible Adam Šoukal, CEO and co-founder of the Roger Payment Institution
- Where does the idea that a bank could be your investor, or even a partner, come from?
We tested cooperation between Komerční banka and Roger already 4 years ago as the pilot cooperation and it simply worked for us.
2. Why Komerční banka?
Already during this pilot, we realized that the bank can pull together as a team, is internally unified and customers are the priority.
3. What are the advantages or disadvantages of cooperation between a start-up/fintech and an institution of the size of Komerční banka?
There is a great deal of knowledge and experience in the banks. If start-up/fintech can draw on this it can avoid mistakes, save money and time.
The banks as Komerční banka, have a large customer base, so even a few percent of its total that starts using fintech services can mean really interesting growth.
Another particularity is reputation. Komerční banka has a strong and stable brand, and there is a big difference for customers in terms of comfort and trust, whether Roger talks to them as part of the Komerční banka Group or Roger as a stand-alone fintech. Finance is about trust. Technology nowadays is taken for granted.
The risks to be considered when talking about the bank are the same as in any other corporate: you need to spend a lot of time with customers to leave not that much time for “internal matters”.
4. When you think of it retrospectively, could you remember that specific moment in which you decided that Komerční banka really is the right partner for you?
Jan Juchelka and David Formánek persuaded us😊. (Editor’s note: Jan Juchelka is CEO and Chairman of the Board of Directors at Komerční banka, David Formánek is Member of the Board of Directors at Komerční banka) I also had the opportunity to work with Jitka Haubová (Member of the Board of Directors at Komerční banka), and it seemed to me that if these people run the bank, it could not turn out badly.
5. When we compare start-up and corporation and their company culture, do you think that this connection will also cause that they will more or less adapt to each other? Do you think that the start-up on the one hand shall adapt to some corporate rules and the bank on the other hand shall learn to be more dynamic?
Whether the bank becomes more dynamic in time should be judged by someone else and not me. However, each new product, especially when it comes to fintech’s product, brings a higher degree of digitization and usually better user experience, which is generally good for the bank. It is also necessary to correctly include this product into the product portfolio and offer it to customers it suits. There is definitely additional work with it. But as we all know „No pain, no gain.“.
I don’t really believe that Roger or Komerční banka can fully adapt to each other. In Roger, we want to grow and we build our success on a friendly and responsible approach to customers and people in the team and in Komerční banka. I perceive that this is something we see in the same way.
6. How and for how long did the mutual “courtshiping” last?
Roger’s full roll-out, i.e. the inclusion of our product into the service portfolio of Komerční banka started 3 years after the first negotiation of cooperation. You may say, that is a long time for a young fast-growing company, but it had the advantage that when we signed the contracts, we all had a high degree of certainty that the cooperation was well tested and it would work. I worked in a large bank, so I was aware of how it works in the corporate. But for someone who may not have had the opportunity to gain such an experience, the banking environment may seem so conservative that he could give up the cooperation.
7. Does this equity entry into Roger mean any changes, for example of your business model?
No, it does not. Roger is a completely separate unit. Neither Komerční banka nor KBSS has any executive functions in management and nothing changes in our business model. This means for us that we have a good brand and enough liquidity, so we can reach more customers than before.
8. What has happened since the asset entry? What are the next development/expansion plans?
We have included our products into the product portfolio of Komerční banka and this brings us many opportunities. I think that so far the interest is above our expectations. So we have a lot of work in the Czech Republic and many interesting ideas for the future. Stay tuned!