Koen Vanderhoydonk (The Connector)/ Frederik Simoen (Area42)
Get ready for an enlightening conversation with Frederik from Area 42, a pioneering Belgian FinTech company, as we explore the intricate world of international trade finance. What if trade finance could be democratized and simplified, making it more accessible and implementable for small and medium businesses? Friedrich gives us an interesting take as he discusses Area 42's mission to make this a reality. He shares his team's unique challenges in their endeavour and how they plan to make international trade finance more attainable for SMEs, startups, and scale-ups.
Stay tuned as Friedrich walks us through the advantages of being free from legacy systems and the flexibility of adopting a technology-agnostic approach. Listen to the story behind their trailblazing B2B BNPL product, TermStack, and the benefits it offers customers. Get a sneak peek of what Friedrich expects from DFS and who he is eager to connect with. This episode is a must-listen for anyone keen on learning about advancements in trade finance or the dynamic field of FinTech. Join us on the journey to uncovering the untapped potential of trade finance for SMEs.
Thank you for tuning into our podcast about global trends in the FinTech industry. Check out our podcast channel. Learn more about The Connector. Follow us on LinkedIn.
Get ready for an enlightening conversation with Frederik from Area 42, a pioneering Belgian FinTech company, as we explore the intricate world of international trade finance. What if trade finance could be democratized and simplified, making it more accessible and implementable for small and medium businesses? Friedrich gives us an interesting take as he discusses Area 42's mission to make this a reality. He shares his team's unique challenges in their endeavour and how they plan to make international trade finance more attainable for SMEs, startups, and scale-ups.
Stay tuned as Friedrich walks us through the advantages of being free from legacy systems and the flexibility of adopting a technology-agnostic approach. Listen to the story behind their trailblazing B2B BNPL product, TermStack, and the benefits it offers customers. Get a sneak peek of what Friedrich expects from DFS and who he is eager to connect with. This episode is a must-listen for anyone keen on learning about advancements in trade finance or the dynamic field of FinTech. Join us on the journey to uncovering the untapped potential of trade finance for SMEs.
Thank you for tuning into our podcast about global trends in the FinTech industry. Check out our podcast channel. Learn more about The Connector. Follow us on LinkedIn.
Welcome to the Connector podcast, an ongoing conversation connecting FinTechs, banks and regulators worldwide. Join CEO and founder Koen van der Hoijdon as you learn more about the latest available trends and solutions in the markets.
Koen Vanderhoydonk:
Welcome to another podcast from the Connector, in collaboration with Belgian FinTech, and we're running up to the Digital Finance Summit, and today I've got Friedrich with me, and Friedrich works at Area 42. So tell us more about where you work from and who you are Okay, hi, koen, nice to be here.
Frederik Simoen:
So I'm working for Area 42 as the strategy and innovation manager and, yeah, what we do at Area 42,? Area 42 was launched by Credendo, a Belgian credit, insurance and trade finance company, to explore innovations in the trade domain, and trade is, for us, anything that is B2B and that is commerce. So it's not trade of financial products, it's trade in the real economy, trade of goods, of services, between companies, between countries that we're interested in. And then we as Area 42,.
Frederik Simoen:
We are a type of venture builder, so we try to test and develop new products, new services for companies that trade internationally. And again, my role is to be in charge of strategy and innovation, so I manage basically our portfolio of ventures and future ventures that are in development.
Koen Vanderhoydonk:
Wow, super interesting, and what would you see would be the real mission that you guys have. What are you trying to achieve?
Frederik Simoen:
What we want to achieve in the end is have products out there that are actually used by these companies, by these B2B companies that trade internationally and make it for them easier to do business. To make business smoother, more digital, more transparent that's the objective for us.
Koen Vanderhoydonk:
So you actually wanted to democratize and to simplify trade finance.
Frederik Simoen:
Yes, we want to democratize, we want to simplify trade finance, definitely, and we do that by leveraging technology in everything that we do. We do that both on an external as well as an internal way. So when we do that externally, we want our solutions to be as easily implementable, usable as possible. That's why we work with APIs and everything we develop. That's why our decision making is as automated as possible. We don't want to have people doing things and people taking decisions and basically slowing everything down. We want everything to be accessible and as easily and as quickly applicable as possible. We also don't want to create new tools or new frameworks in which people want to start working. We want to be where they already are and implement in their own processes, in their own systems.
Koen Vanderhoydonk:
That's what incremental innovation is.
Frederik Simoen:
So yes and no, I think we want to bring disruptive products to the market, but we want to do that in an incremental way. So we want to solve the problems that people have today with new solutions. We're not doing things that already exist. We're doing new things, but we don't want to bring spaceships into people's life. We want to. We want them to continue working in the way that they do now trade finance.
Koen Vanderhoydonk:
It's a very specific type of industry. Could you maybe tell us a little bit more what would be the typical business sort of challenges that you come across within this domain?
Frederik Simoen:
Yeah, I'm gonna narrow it down and a bit, because trade finance every as I said before, every B2B company that trades goods or services Internationally need some kind of trade finance. Now we at area 42 we focus on the smaller company, so we focus on SMEs, startups and scale ups, because we see that for them there are still gaps to overcome. Where the bigger companies, they have extensive finance teams, they have experienced CFOs and financial profiles, that is not necessarily the case. Or this SME that has 2030 employees has maybe two people in the finance team.
Frederik Simoen:
Don't have time to build the files, to make the dossiers, to get their International trade finance. So that's why we want to be there for them so that they don't have to rely on the Expensive middleman or on the very cumbersome administration. That is more accessible for the larger companies and that's why we want to bring digital, easily accessible tools and solutions for the smaller companies so that they can Trade internationally as well.
Koen Vanderhoydonk:
Hmm, is that, then, the reason why, for many years, it was the big banks that were sort of having these innovative projects around trade, finance and very often Related to their first use cases on blockchain and everything is that? Is that, then, the main difference between you and and all these Innovation that was happening within the banks itself?
Frederik Simoen:
Yeah, so I think a lot of Innovation has happened in the banks and still is happening in banks and other large incumbents, and it's it's necessary because they also have a big position in the market, but for them it's harder to be more disruptive and to actually bring their solutions to market. I think that is also why kid then don't chose to have area 42 Outside of the core of the company, so that we are in a freer position. We are not messing in internal kid then though systems and technology. We are also not impacting their existing customer relationships. We're testing things out there Without impacting the, the mother company. So we are in a more free position as a fintech and not bound by the larger incumbent organizations, yeah, such as the banks that have been in overt in innovating and continue to innovate and also, I think, collaborate quite successfully.
Koen Vanderhoydonk:
So you're liberated from legacy systems.
Frederik Simoen:
That's very important in innovation.
Koen Vanderhoydonk:
Yeah, would that mean that you're not necessarily also look at same technologies, like there's a lot happening around digital digital currency, cbdcs, to an extent Blockchain DLT is. Is that you see that coming back in the initiatives that you guys run? I?
Frederik Simoen:
Think it's. I think those technologies are really interesting and I've been also looking into them myself for I think almost 10 years now. I think they're coming back. I think there was a period when everyone was doing something with blockchain, but there clearly was no use case for it. It was just a technology that was interesting. I think in the next couple of years, blockchain could be coming back. I think what is, for us, at area 42, very important is we want to solve real problems, so we are technology agnostic. We want to find problems that are impacting businesses today and where businesses need solutions for today, and if Blockchain or any other type of web 3 Component can be part of that solution, and we will implement it. So that's why we are keeping an eye on it. That's why we're following everything that is happening. Yeah, but we will never start a blockchain project for the sake of using blockchain.
Koen Vanderhoydonk:
Because that way we are not creating value for our customers. No, and to that extent, I feel that the move you made, or what you describe, is pretty much something that is happening also within the banks. You see that much more of the innovation within the banks is literally to solve real problems. Now could you give us a couple of examples, or one example how you actually made a big change for one of your customers through the innovation triggered by Area 42?
Frederik Simoen:
Yeah, sure. So I think the case that we like to mention is one of our products, which is TermStack, and TermStack is B2B BNPL so buy now, pay later service that we have been developing from scratch, and we've been on the BNPL train since it started, I think about three years ago, with this specific solution, where we are very confident that our solution is a very good one and is actually being used by customers to their benefit. So we have several online marketplaces out there that are using our TermStack BNPL to offer their customers better payment terms without impacting their own finances, without impacting the customer's finance, and where we, as a FinTech intermediary, with our solution, can bring value In the way that I described before. We're not drastically changing their business processes. Payment terms have been around forever, but with an easily implementable solution based on APIs, without or with very limited human intervention, we can give them fast decision making and payment terms at beneficial rates for their customers.
Koen Vanderhoydonk:
Sounds very exciting. And talking about excitement, in the beginning we started with DFS, so what are you expecting from DFS?
Frederik Simoen:
What I'm expecting from DFS is what I'm expecting from any type of fair like DFS. I'm going to be attending Web Summit in a couple of weeks. I'm not sure DFS is at the level of Web Summit yet, but still I expect to be inspired. I expect to have interesting conversations and be in touch with people who can introduce me to new opportunities in the market or even just make me aware of technologies or solutions that I haven't or I had not encountered before. So for me, dfs I'm really looking forward to it as a day of inspiration and a day of connection with the outside world.
Koen Vanderhoydonk:
And what type of organization should come to you? Is it only when you're involved in trade finance, or you're more open and say wait. This is a domain where I'm particularly interested in.
Frederik Simoen:
Yeah, I think trade finance it can be defined in a very narrow or in a very broad way, and I'm always interested to have a conversation. It doesn't mean that if we have a conversation that we will also have a partnership or that we will work together. But I think anyone who feels that they are remotely involved in trade finance, I would be very interested to have a chat with them and we can collaborate in many different ways. Maybe they have a problem that they want to see solved in their business and that they think we can be involved in solving that. Maybe they have a solution that they want to bring into the market. We have invested and partnered with external startups before as well. Maybe they want to join us and work in our team in building those solutions. Or maybe they just want to have an interesting conversation. So I'm basically open to anyone who wants to have a chat, to reach out to me and to have that conversation.
Koen Vanderhoydonk:
Oh nice, and I think that that is one of some of the magic that always happens at DFS, so I think that will be not a problem necessarily.
Frederik Simoen:
Maybe one question before I will be joining DFS.
Koen Vanderhoydonk:
Exactly. Well done. It's good to see you there. One thing that was still on my mind is and that was triggered a little bit by the fact that you say we do innovation for the SMEs the smaller medium enterprises but trade as such is, by definition, almost a global element. So how do you ensure that, with smaller companies, you still keep the relevance and adaptability going on in this world of trade finance? Smaller companies, larger scope.
Frederik Simoen:
Yeah, that's correct and that's that's. That is a challenge. I think one of the ways in which we are trying to work around that challenge at Area 42 is by being maybe not globally, but definitely Europe oriented. So our whole team is spread over Europe. We are not a team of people sitting together in an office in Brussels. We have colleagues in Prague, we have colleagues in Lisbon, we have colleagues in Paris, there are colleagues in Italy and Romania as well. So that's how we try and stay in touch with the whole of Europe, even if it's if it's not in a structured way. By having all these people in all the different countries, we know that more things will come to surface, and that's what we also do by attending conference. Of course, me as a Belgian, I look forward to attending DFS in Brussels, but I also don't limit myself to Belgian conferences with Belgian attendees. You have to look what's out there and you have to stay connected to see what is happening.
Koen Vanderhoydonk:
Maybe one last question, because you said you're open for collaboration and conversations, but how can they get to you? What do they? How do they come to you?
Frederik Simoen:
Yeah, so first of all, I hope to run into people at DFS, of course. So if you see me at DFS, come and say hi. But my LinkedIn I'm Frederik Simun. You can find me there and connect with me, or even on the Area 42 website you can also there's a forum there where you can reach out to me directly and get in touch. So if you want to get in touch with me, I don't think it should be an issue to find me and to have that conversation.
Koen Vanderhoydonk:
Great. Thank you so much. It was a great conversation. I learned a lot, so thank you again, and also to the listeners. Thank you very much for staying tuned and hope to see you all at DFS in December. Thank you very much.