1. Tell us a bit about yourself, your background and leisure.
My name is Spiros Margaris, and I am a venture capitalist (VC) and the founder of Margaris Ventures. I have been in the investment business for quite some time, with more than 25 years of international experience in investment management/research and startups. In my role as a VC, I also act as an advisor to my globally spread FinTech and InsurTech startup portfolio. I am the first international influencer to achieve ‘The Triple Crown’ of influencer rankings by being ranked the global No. 1 FinTech, artificial intelligence (AI) and blockchain influencer by Onalytica in 2018. I am very fortunate to regularly appear in the top three positions of the established global industry influencer rankings due to the generous support of great FinTech industry friends and participants. In 2017, I had the opportunity to give a speech at the TEDxAcademy Talk. In addition, for the enterprise software vendor SAP, I wrote an AI white paper, ‘Machine learning in financial services: Changing the rules of the game’.
2. What are your professional focus areas, overall and within FinTech?
I cover the whole spectrum of the FinTech space, and I am invested across the sector, as I am also invested, for instance, in InsurTech. I am a generalist, and I want to stay that way. It gives me a more objective view of what new business concept or strategy could work or not. I do not want to fall in love with a specific field within FinTech or any other industry I am involved in. If you fall in love with an idea, you lose objectiveness, which should be avoided if possible, at all costs, in my view. I try to work with great people who want to change the status quo, have great ideas and visions, and put up the very hard work to do so to achieve their high goals. Hopefully, timing will do the rest. One must know that the longer a startup survives, the bigger the chance that the moment of the right market timing will happen, while they are around. So that is why I always try to emphasize this to the entrepreneurs and investors involved in a promising startup.
3. What opportunities or challenges are FinTechs creating for European Financial Institutions?
European financial institutions—and that goes, of course, for the whole world—are forced to change very quickly to survive because of the attacks on their status quo. The threat to the incumbent business will come from FinTech startups and tech giants that increasingly come into the financial space, and the trend has only just begun to pick up speed. The disruptive FinTech movement has, at first sight, a negative effect on the incumbent old proven business model. But if you take a second look, most people should realize that the FinTech disruption allows great people within established financial institutions to have reasons and arguments to bring to top management to adjust to a new world and convince them to change and invest in the technological future.
4. What do you think about the incumbents’ response so far?
I think some incumbents try harder and more successfully than others, and we see changes happening, but I think most banks are not there yet, meaning they are not committed to changing radically. Incumbents are more involved in maintaining the status quo and the old legacy systems than in investing in the future. Banks, at best, are afraid to throw out the baby with the bathwater, but maybe that is what is needed to start fresh, at least that should be the big guiding thought among the key decision makers. I think the pain within such large organizations is not big enough to change radically. Furthermore, top management either does not believe in radical change or could not care less because they will not be around when the consequences cannot be ignored anymore. The situation for the financial industry is very serious, and the damaging tsunami will hit the financial shore in a way that will make us wish that some incumbents would have acted more responsibly towards their customers, employees and shareholders by being more proactive risk-takers.
5. Which way do you see the sector going and who would be the likely winners?
The FinTech sector is in its very early stages, and we will see things evolve, from just improving the current banking services to rethinking banking in a way that we still cannot imagine now. I think we still cannot say who the winners will be in the FinTech space because we are in the beginning of this disruption. Whoever we proclaim as possible winners will make any of our predictions likely look very dated sooner rather than later. We have just taken baby steps towards what will be possible with FinTech and AI. Future banking services will be done for us without little or any input from us!
It is exciting to think that everything is still possible, and most things will change in a way that we will not expect now. I keep my imagination and open-mindedness that everything is possible in order to better take advantage of the great opportunities ahead of us. FinTech will evolve from improving banking services to revolutionizing the financial industry. In the future, you will not feel that you are using banking or any financial services—but you are. FinTech solutions in the future will seem magical initially and then normal after a while, like breathing air.
6. You lately joined Hufsy as a senior advisor. Why?
I joined Hufsy because I always saw a clear and great opportunity for their growth strategy in the small-to-medium enterprise (SME) segment that they are pursuing with a laser focus. When my good friend Frank Schwab asked me to speak with Hufsy CEO Kristoffer (Peterson) and investor Martin (Lumbye), I took the great opportunity to hear their vision and strategy regarding how they want to make Hufsy a success. After our meetings, I felt a great alignment of our view on how to provide entrepreneurs in SMEs with simple and valuable financial solutions.
Something that is very important to Hufsy’s board, management and me is the very strong commitment that we do not want to offer a so-called diner restaurant experience that you find in the US, where you find a lot of good dishes to eat on the menu but nothing very special.
Many of the challenger banks try to provide a lot of banking services but at the cost of not being really good at something. I must admit that, as the first person who coined the ‘FinTech supermarket’ expression that we see now pursued by most challenger banks, I did not foresee then the danger of the approach. The big danger of the FinTech supermarket approach that is pursued by challenger banks is that they are not really, really, really good at most things they offer to their clients, and they likely move towards mediocracy with their offerings.
Let us be clear, I love what Revolut, Monzo, N26 and others do for the challenger bank industry—and the FinTech industry in general. But I see the future more and more in the highly specialized world Hufsy wants to pursue and to be great at.
As I said before, we at Hufsy do not need to be the first mover in the neo and challenger bank industry. The neo and challenger bank industry is still in its early stages, and the customer market share will shift around among new neo and challenger bank players and the incumbent banks.
We at Hufsy want to serve the small and medium-sized company (SME) entrepreneurs with their special needs for fast account opening, good tax services and convenient invoicing services. Our goal is that SME entrepreneurs can focus on doing business and growing, and we will support them along the way with our focused services behind the scene. In other words, with our laser focus on trying to be the best in our field, we allow SME entrepreneurs to do the same, namely to stay focused on their strengths.
If we achieve that goal of high specialization and great offerings with a laser focus and not go broader, like the FinTech supermarket approach, then we will be better than most, regardless of the market size of competitors. Consequently, we will be more successful and profitable.
To summarise, we at Hufsy need and will do things better, simpler and with greater focus than our competitors to provide a compelling value proposition that works for our SME clients.
7. What’s on your bookshelf/holiday reading list?
One of the books I liked quite a bit was Kai-Fu Lee’s book AI Superpowers: China, Silicon Valley, and the New World Order. I try to read as many books as possible, but it is hard to keep up with the studies, articles, etc., that I come across on my daily read and that I share with my Twitter followers. At the end, it does not matter what you read, as long as you read whatever you get your hands on with passion and curiosity and regardless of whether you agree with the opinion expressed by the authors. This approach helped me to keep an open mind and see opportunities beyond my own knowledge. That open-mindedness also applies, of course, to exchanging and listening to thoughts and ideas from other people, regardless of their professional background, because great ideas and thoughts can come from anywhere. You just have to respectfully listen to what they have to say.
Thank you for having me on your great interview series.