Q&A, Scaling Enterprise FinTech

Scaling Enterprise FinTech: with Sheila Kagan of PayKey

This interview is part of Scaling Enterprise FinTech | The Handbook, launched in Mar. 2021 in partnership with SixThirty Ventures and Finovate Europe. The Handbook includes proprietary research on ca. 65 Enterprise FinTech scaleups in Europe, Q&As with 16 founders on their journey to scale, as well as insights from 10 leading investors and financial institutions. Whether you are a founder with an idea, an early stage startup looking for inspiration and learnings, or an investor or financial institution looking to understand the difficult but rewarding journey to building a world-class Enterprise FinTech firm – download the Handbook here http://www.fintechforum.de/sef/

1. Tell us a bit about yourself and your company.

I joined PayKey in March 2020 after years of working as a chief executive at a variety of public and private tech companies in the advertising and gaming industries. Throughout my life I’ve been drawn to the dynamics of the banking industry, and once the opportunity came, I knew PayKey is a FinTech uniquely positioned to leave a mark on an industry that is traditionally lagging behind.

At PayKey we are putting banks at the forefront of embedded banking, by weaving the financial services customers need within their everyday lives. Our patented mobile keyboard solution allows customers to access a variety of mobile banking services including P2P payments, loans, investments and more within all the social & messaging apps they are regularly using like WhatsApp, Instagram, Facebook and others. With our solution, banks can contextually bring their services to where customers today chat, transact, and make their financial decisions.

2. Give us the backstory- how did you get the founding idea, and how did the first sale come about?

PayKey was born out of the realization that millennials today need completely new tools to manage their financials. This considerable segment is seeking, and even expecting greater accessibility and ease with advanced interfaces that “speak their language” and appeal to their technological nature. It then became clear that by allowing banks to take part in millennials’ natural environments – social & messaging apps where they spend much of their time – banks are able to redefine their relationship with this younger audience and boost their digital innovation.

We then learned that this need is shared among many other customer segments, and today our solution has gone mainstream serving as a powerful engagement channel for banks with their mobile banking customer base.

3. Could you summarize your journey to scale from a sales, go-to-market and business development perspective, perhaps split into 2-3 key phases?

When PayKey first started over 6 years ago, the solution captured the interest of innovation divisions within banks who sought new ways to understand and interact with additional consumer segments for expanding their customer base. Following the launch of our solution globally, banks had a watershed moment once understanding its impact, transforming it from an innovation factor to a must-have solution. This need was amplified with the entrance of new Big Tech and FinTech competitors who have applied significant pressure for banks to step-up their digital game and deliver the experience customers seek. We are fortunate to have reached such momentum fueling our expansion with additional partners today.

4. Which was the most challenging phase, and what would you have done differently?

An initial challenge we faced was shifting our solution’s positioning from an innovation factor to an essential new growth engine for banks. After proving clear ROI on the innovation side, we were able to bridge this gap, making the solution a key value-creating engagement channel.

5. When did you decide to expand to the international/ US market, and how?

From the get-go our product was designed to fit an international market, supporting a multitude of languages, and offering an enhanced customer experience localized for different territories. We therefore began on a global scale, working with leading banks in key regions. We are now expanding to new territories like the United States, where the market’s maturity and consumer demand for such solutions created fertile ground for penetration.

6. When did you first decide to raise venture capital, and what has been your approach to financing growth over the years?

We began to raise VC funds when reaching our scale-up phase and required funding to support our goals. Once commercializing in different regions worldwide, we needed to expand our R&D, sales, and business development teams to support our proposition and launch localized products with the best UX for each region.

7. How is building an Enterprise FinTech firm different from a “regular” SaaS / Enterprise Tech company, and what three things should founders get right?

At the core we are a B2B2C company, meaning we must fully support our banking partners to get the customer experience just right. Contrary to SaaS platforms, we offer a holistic solution which includes dedicated go-to-market support, alongside deep data analysis and constant optimization to boost adoption and engagement with services. Therefore the 3 things FinTechs need to get right are:

  1. From day one think B2C despite being a B2B company, that means thinking about adoption and UX on the path to generating positive ROI.
  2. Data analysis is the backbone of any successful product, essentially building user journeys and customizing the product for different consumer segments.
  3. Maximum impact with minimal integration effort, build a plug & play solution that reduces tech integration resources, enabling short-time-to market.

8. What’s on the priority list for you and your team for the next year?

Over the next year we will expand our footprint in the embedded banking landscape with unique solutions that fulfill consumers’ real-time financial needs in non-financial environments. As a technology partner for some of the world’s leading banks we can leverage the success of our keyboard solution to strengthen the touchpoints between banks and customers on the path to cultivating financial wellbeing. This will allow banks to scale-up their digital solutions quickly to answer changing demands in the new financial reality today that will linger post COVID-19.

9. Where is the financial services sector headed in the next 12-18 months, and what should we be watching out for?

Without a doubt the financial industry will continue its embedded evolution guided by the principal that convenience is the new loyalty for consumers today. We will witness more and more non-financial companies seek banking licenses, leveraging their deep understanding of consumers to personalize services for their real-time needs. Incumbent players will likewise join the new wave, surpassing years of lagging behind with new customer-centric approaches.

10. Your favorite place(s) for a meal, coffee or drink (pre-COVID19)?

My favorite restaurant is FOUR ONE SIX (416) a vegan gem in the heart of Tel Aviv.g