7 Questions

7 Questions with Sebastian Hoop, MD at Collect AI

1. Please tell us a bit about yourself, both at work and leisure.

Initially, I planned on studying medicine after graduation. To earn money prior to getting accepted, I began to turn my hobby into a profession: Software Engineering. This was during the big internet hype and lead me to give up my curriculum and focus on programming. I then founded my own web development company together with a partner instead. When the internet bubble bursted, we successfully changed our focus to remarketing and advertising software . After selling the business and being a CTO at the Telekom subsidiary Emetriq for seven years, I joined collectAI as Managing Director. The fintech, part of the Otto Group, provides an AI-based software platform to digitize account receivables.

On the private side, I live in the Eastern part of Hamburg together with my wife and my toddler.

2. What are your professional focus areas, overall and within FinTech?

We improve the way companies communicate with their customers. With this we have specialized in making it easy and convenient to solve open payments.

The software platform focuses on improving collection rates, reducing costs and increasing customer retention. Core industries among others are financial institutions, utilities, e-commerce, insurance and mobility providers. Having integrated many clients we prove our concept and are now in the growth phase. Also we are building a great company culture with a fantastic team of around 45 ambitious colleagues from all over the world.

3. What opportunities or challenges are FinTechs creating for European Financial Institutions?

Traditional financial institutions are often slow in innovating processes internally. Due to important short-term goals, they tend to postpone important changes in the course of digital transformation while also neglecting the importance of customer loyalty. Most firms have already digitized parts of the customer journey, but they focus on customer acquisition. Significantly little to no digitized are the processes from the payment. That also applies to receivables management. It is important to communicate particularly well in difficult customer situations in order not to put the customer relationship lightly at stake. Therefore, under the pressure of young players, customer loyalty and the creation of digital added value become increasingly important even after the contract has been concluded.

A cooperation with fintech startups like collectAI offers traditional Financial Institutions the opportunity to innovate faster. Because: Fintechs finds it easier to disrupt and work together with banks on the customer relationship and to optimize processes.

4. What do you think about the incumbents’ response so far?

Financial institutions – just to name one example – have recognized that digitalisation offers solid opportunities to keep their customers. Our client (!), Hanseatic Bank, a subsidiary of Société Générale. has established itself as a leader in digital receivables management. The bank uses our software for payment reminders in the area of ​​credit cards and consumer loans via SMS and email. An essential advantage of the AI-based technology is the flexible use of different communication channels as well as an individualized timing for the time of establishing contact. Whether email or SMS, the customer receives a pay link to a website in the look and feel of Hanseatic Bank, where he can conveniently settle his outstanding amounts and contact customer service. In the first six months of cooperation, the modern approach to customer communication increased the implementation rate of the Hanseatic Bank by a total of 24 percent – 14 percentage points higher than in the previous results. In addition, the Hamburger Bank reduced its expenditure on receivables management by 88.6 percent in this area. Thus, the digital dunning system of the Hanseatic Bank brings three goals in line: It optimizes customers’ willingness to pay, lowers their process costs and increases customer satisfaction.

5. Which way do you see the sector going and who would be the likely winners?

Information is at least as important as cash. A sheer mass of data and AI algorithms can also be processed for the financial industry. Other parts of the value chain at financial institutions will be made smart in future by AI mechanisms; Personalized quotes and investment advice, chatbots, voice banking, compliance, risk management, fraud detection are just a few areas. One thing is clear: AI is unstoppable, it will revolutionize the whole financial industry. The winners will be those who use AI and customer relationship data to create true customer value.

6. What tip would you like to give FinTech entrepreneurs?

Never a failure, always a lesson If you fail fast and have a great team around it, you can learn from your mistakes and bring your idea to success ultimately.

7. What’s on your bookshelf/holiday reading list?

Professionally I like to read books like LEAP by Howard Yu or Lost and Founder by Rand Fishkin.