Varan Pathmanathan's job at Danish-based Capital Market Partners (CMP) is the result of a realization. One day, it occurred to several of the firm's partners that the continuous emergence of financial technology or fintech startups, and the escalating M&A activities in this area were causing friction. Someone had to give help here to smooth the ride.
"I was the dissertation supervisor of Junaid Ahmed, the co-founder of Brickshare (crowdfunded real estate investments). When he illustrated the difficulties he encountered just trying to get the right kind of license from the Danish financial authorities, it dawned on us: somebody out there will at some point need help getting these fintech startups integrated into the overall system," Kenneth Brandborg, partner at CMP says to AMWatch.
"Employing Varan is the result of that realization," he says.
31-year old Pathmanathan was employed at CMP in January, and he is dedicated to helping clients who have integrational issues with their new collaboration with or ownership of a fintech startup.
"There is a severe need for a doula or labour coach at the births going on in the capital markets these days. Just trying to bridge the gap between the middle-aged developer, who's been programming in Cobolt for the past 25 years, and a 27-year old independent startup individual who's used to moving things around at a speed and with an ease that just isn't viable in an established setup, can be a huge challenge," Pathmanathan says.
Hearing about what your competitors do can be quite intimidating, but things may not be as they appear.
Helping provide clarity on competitors' situations is a job in itself for a clever consultant. Many might have an actual fintech department and so signal that they are all in on fintech and the development of their current business, but the reality could be that the department is made up by one person not 50.
"We help people achieve clarity on what is viable with the data they have available already. Some might be totally paralyzed after hearing about the activity level going on with the big players. How do you go about eating an elephant? One bit at a time you know. We help clients realize that they indeed can eat a whole elephant and that they also have the cutlery to do it in place already. Or to put it in another way: there is no reason not to go into fintech if you have a good coach to help you," Pathmanathan says.
Fight for end customers changes the game
How does the situation today differ from the time when Reuters, Bloomberg, Calypso and other systems were taking all the attention 25-35 years ago?
The technical solutions that were launched back then were primarily driven by regulatory and operational demands. The value of those systems was on the adviser side of the system. They gave value to the back office. The tech-solutions made today are value creators for banks and especially for end customers.
"The fintech products we see today are of a different cut than before. Today's products are much more plug-and-play. You can hang them onto your business like charms onto a bracelet and in this way show your personal style. Attract that exact customer who has a need for this product. Thirty years ago most of the fintechs were not just attractive add-ons to the visible part of your business. They were products that had to be plugged in at so many different entities in the middle of the organization making them much slower and rarer because of the difficulties they brought with them," Brandborg says.
"Today it's much easier to make a new product and plug it in. But because there are so many plug ins and APIs coming at you at a high speed and frequency, most still need help cutting through the clutter, finding the gold and actually implementing it."
When fintech began, it was all about cryptocurrencies, block chains, P2P lending and equity crowdfunding sectors and usually promoted by some highly knowledgeable tech people who did not know that much about the financial industry but that is changing.
"What we see now is that there are players with a substantial understanding of the market they are operating in, which also makes the products more interesting. They just need to be integrated successfully hence 'Fintechgration'", Pathmanathan says.
CMP is hosting a Fintechgration event on 21 June in Copenhagen. The event was booked out quite quickly, Pathmanathan explains and takes this as a sign that the need for Fintechgration and help to get it done is very much a fact.