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The Connector Podcast - Milan Fintech Summit: Journey from Intrapreneur to Co-Founder in Open Banking with Ana-Maria Georgescu from Smart Fintech
Join us for an insightful conversation with Ana-Maria Georgescu from Smart Fintech, recorded at the Milan Fintech Summit for the European Digital Finance Association (EDFA).
Discover how Anna transitioned from a non-technical background to becoming a prominent tech industry figure, starting her journey at IT Smart Systems in Romania. Her career reached a pivotal moment when she co-founded Smart Fintech, inspired by the PSD2 Open Banking Directive. Anna's story is a testament to perseverance and ambition, highlighting her evolution from an intrapreneur to a co-founder as she embraced new opportunities in the rapidly evolving tech landscape.
Explore the path of Smart Fintech since its inception in 2019 as Anna shares the challenges and triumphs of securing an open banking license in Romania. Learn about their strategic focus on the Romanian market and the innovations in open banking services, including the launch of payment solutions in e-commerce in 2024. We look ahead to the future of open banking, discussing the role of customer-centric products, self-sovereign identity, and digital wallets in building trust and security. This episode offers a fascinating glimpse into the controlled approach needed for open data, blending technical prowess with financial foresight.
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Koen Vanderhoydonk
koen.vanderhoydonk@jointheconnector.com
#FinTech #RegTech #Scaleup #WealthTech
Welcome to the Connector Podcast, an ongoing conversation connecting fintechs, banks and regulators worldwide. Join CEO and founder Cohen van der Hooydonk as you learn more about the latest available trends and solutions in the markets.
Speaker 2:Welcome to another EDVA interview, and today I'm here in Milan at the Milan Fintech Summit, and I've got with me Anna. Anna works for Smart Fintech, so all the way from Romania, can you tell us a little bit who you are and where you come from?
Speaker 3:I'm Anna, anna Maria Georgescu.
Speaker 1:It's a long name.
Speaker 3:Exactly, I'm born and raised in Bucharest, romania. My professional journey starts 20 years ago, so it's a lot of time, and it has its roots in IT Smart Systems, which is a software company a.
Speaker 3:Romanian company established 25 years ago. So we grew up together, let's say, and my experience started with, let's say, an interesting role, role which is production support. I was initially responsible for the production activities my company performed for one large telecom company in Romania. I don't know if I can tell the name or not, it's not even important, it's not even a secret, Exactly.
Speaker 2:We're here in Italy, so they don't know.
Speaker 3:anyway, Okay, it's Vodafone, okay I think they do know yes exactly, but yeah, after that I grew up somehow natural in the company and I decided to remain in main in a period in which everybody was very astonished by the corporate dream, I decided to stay.
Speaker 3:At that moment, the company was around 20-25 people, so a small company. That's why I'm saying we grew up together. I became a team leader and after that, project manager. I was also a tester, a programmer, and ended up being a partner responsible for business development and for, let's say, end-to-end deliveries for large companies, large clients in Romania, and not only because the company grew and now IT Smart Systems covers various geographies.
Speaker 2:If I take you back to the career that you had that's 20 years. It's a long time. What have been like the major milestones that actually changed your career into where you are today?
Speaker 3:I think the first milestone was that I decided to work in tech industry Because when I started in 2003, it was a period in which the tech industry was not that developed and you could either be a programmer or I don't know a project manager. It the roles were fewer simple. Everything was different so no agile no agile, just waterfall just waterfall it's not bad we can debate.
Speaker 3:You're trying to get some questions there so the first milestone was to decide I want to do tech. Then the second milestone is not a milestone, it's more an experience Is what I learned, because at the beginning it was very hard for me doing that production support. Why was it so hard? Because I will tell you a dirty secret that everybody has.
Speaker 2:Everyone dirty secrets.
Speaker 3:Dirty secret my background was not in a technical university, was in a business one.
Speaker 2:I had some, Ah, but then I have to take all away my questions no not necessary.
Speaker 3:I had some, let's say, intimate with some technical field. My high school was specialized for programming activities and so on, but university was not so the first decision was to make that switch, that career switch.
Speaker 3:It was hard at the beginning. So this is the second milestone. I say because I struggle to remain, even if it was hard to understand what was happening around me and I had to learn a lot. So my actual technical, let's say learning experience was inside the company. Already in the working field I had to learn quickly and it was the best experience that somehow shaped my mindset. That is very useful for smart fintech, for example, because when things are hard and you don't know what to do or you need to struggle and find a solution.
Speaker 3:You have to be very resilient, I think, and persuasive, even if you don't have answers.
Speaker 2:It sounds like, Anna, you're a person that made decisions and you really thought about making those decisions, so has there any specific things that triggered you to become a co-founder of a new organization? Have you prepared yourself for that?
Speaker 3:A little bit. Yes, Because in IT Smart Systems, I became to be responsible for some areas, let's say completely responsible, completely responsible. So somehow the training for ownership or for assuming and taking responsibilities was there. How we decided to found Smart FinTech. Smart FinTech is based on PSD2 Open Banking Directive issued by the European Commission in 2017. And at that moment, with IT Smart Systems, we were delivering mission-critical projects for the bank, for the financial landscape, and we would provide service providers for the banks that had to implement their own open banking interfaces before being launched to the external players. And so we were at the other side of the world. Let's say.
Speaker 2:You were at the banking side, exactly.
Speaker 3:We were at the banking side. Exactly, we were at the banking side and we identified, we understood very well the directive, what are the aims, what are the purposes, and we thought it's a big opportunity in that space. And in 2019, we launched Smart FinTech with the objective to become an open banking provider and also to become relevant in that open banking space that we saw having big potential having big potential and would you consider the fact that well, FinTech, the SmartFin FinTech, was launched, that this was one of your pinnacle moments of the career.
Speaker 3:Yes, I think so. Yes, yes, for sure, yes.
Speaker 2:And if you look back to that moment where everything changed and you started to have an organization within an organization, did you feel it in your veins that you were an entrepreneur already within a larger organization? A lot of people call it an intrapreneur, somebody that that already has it. The hub, the hoopsva, the willingness to an entrepreneur. Is it something that was always there, maybe because of your studies?
Speaker 3:I think that I'm thinking. I'm talking about me, but I think, if you are willing to take risks, if you are ready to take ownership and to assume responsibilities and jump into the unknown, this is a recipe that works also if you are in an organization and you are having some duties, or if you are an entrepreneur and you want to build something, of course the organization has to allow you and give you the freedom to do that, but there are some root elements in the DNA that can work in both worlds.
Speaker 2:And you have been part of two different industries telecom and finance. On the other hand, how do you see both together? Are there similarities or are they exactly opposites from each other, or something in the middle?
Speaker 3:I think that on one hand, the telecom, I think they are bounded.
Speaker 3:They have a common playground at some point, because the telecom provides the infrastructure that is needed for the financial institutions to work to bring mobile experience to bring. I mean, if a bank provides a mobile channel for a customer, that is an experience that has in backstage an infrastructure, the infrastructure can be provided by the telecom player. So, from that point of view, this is the connection I see, and also the security mechanism and, let's say, innovative changes that are driven by the financial landscape in the financial sector to comply with, let's say, security standards or encryption or other innovative methods, and these methods are also used by telecom companies that are using those innovations to protect their communication channels.
Speaker 2:No, I think that makes sense and at the end of the story they're both working with the same clients, so you do see a lot of collaborations between telecom providers and banks throughout Europe and the rest of the world.
Speaker 3:And there are many other data protection, for example GDPR yeah exactly. It's something quite shared between them Absolutely Well.
Speaker 2:For a couple of times you mentioned the company where you work for now, Smart Fintech but I guess the audience is very curious to learn a little bit more. So you mentioned it's an open banking fintech, but could you tell us a little bit more? What has been the journey and what have you been achieved? What is the model that you apply as a company?
Speaker 3:Yeah, of course. So in 2019, we opened the company. It was a struggle to obtain the license, the open banking license.
Speaker 1:In.
Speaker 3:Romania, the PSD2 directive was translated into national legislation a little bit later than other European countries, so in 2021, we took the license two years after.
Speaker 2:Did it take you two years to get the license? Nine months, nine months, that's fast.
Speaker 3:Because we opened the company, then waited for the legislation to be published. Then we analyzed the legislation, trying to figure out what we should do from a compliance perspective. What we should do from a compliance perspective. Then we worked for the authorization documentation a couple of months I think. Then we sent it to the National Bank and then the entire end-to-end project with the National Bank of Romania took nine months. Initially we got the payment license. We took the payment license and after that we took the account interrogation license.
Speaker 2:It was easier Up, as they call it.
Speaker 3:Yes, and it was easier when getting the second license. It was easier to obtain account interrogation.
Speaker 2:Nine months. It's a short period if you look at stories sometimes in the market that it takes years for some to get a license. Was it a necessary thing to have a license to be operational in Romania?
Speaker 3:Yes, yes, and this is similar for each European country that had to perform similar steps with their national bank. And, after obtaining the license in the home country, each TPP has the opportunity to be passported outside his country and perform activities in other European countries.
Speaker 2:So that is the idea of passporting.
Speaker 3:Yes, it's not a difficult process. So once you get the license, the passporting is not hard at all, it's almost a notification, isn't? It Exactly.
Speaker 2:And do you actually use the fact that you passport in other countries? Do you take benefit of that?
Speaker 3:At this moment, our strategy and our focus is very concentrated on the Romanian market because our thought was we need to influence open banking in Romania and we need to influence Open Banking in Romania and we need to influence how Open Banking works in Romania and make, let's say, a very excellent service there. And after that, growth or going to other market and the truth is that we have many we have huge efforts concentrated not on building the product, because the product is already built, but in educating the market, influencing the banks to improve their service, because on open banking you have a strong dependency on what a bank is offering. If open banking channel has a, let's say, shady quality, you cannot change. You inherit that quality. So our efforts are very much into improving open banking services.
Speaker 2:I find it very interesting that you mention the fact that you had challenges with the banks, but could you elaborate a little bit more? What has been your contribution in educating the banks?
Speaker 3:So it's, let's say, a complex work here.
Speaker 2:We like complex. Yes, yeah, we do like that.
Speaker 3:Yeah, and just a short intro. Open banking was something that was launched by European Commission as a mandatory thing to do and banks were not quite happy about it, still lacking in finding, let's say, monetization models for open banking. So at this moment, banks accepted that they need to perform open banking, because in the early stages, open banking has been seen like something that will come and go, no traction will die. So banks somehow did a more regulatory implementation and that's it. So they are not quite happy and they weren't prepared for open banking to become, let's say, a major industry switch. And now with live clients? Because now we have live clients that are calling for support, they are calling the bank and so on, and it's something that is happening, is the elephant in the room. What we are trying to do is to find, let's say, the best approaches in which we are not being, let's say, that annoying partner that is coming to ask why the things are not working. Somehow we understand why the things are not working because, we worked with the banks back then.
Speaker 3:We understand the struggle they have. So we are trying to be more a partner, to find solutions, to say, okay, let's make a prioritization, what is more important, what is critical for the end user? Let's solve those issues.
Speaker 2:Could you share with us some life cases from the banks in Romania?
Speaker 3:Yes, first of all, the quality increased a lot in the last two years. Why was that? The first clients we had was in 2023. So 2023 was the real start with live clients. 2024 is the year in which we launched payment in e-commerce, so it's a very real-time use case, e-commerce.
Speaker 2:It enables beyond banking, almost right, yes, oh sorry, embedded banking.
Speaker 3:I should rephrase myself yes, and people are using our solution to buy vignettes for the car, for example, or to buy goods and so on, and it's important. If a payment is not working and the client is online, it's hot. So 2024 was the year in which we could feel open banking, we could touch open banking and banks improved a lot. So so in those two years, we have seen major improvements. Still needs to be, steps needs to be done.
Speaker 2:So I have to admit that. Do you also have examples that are triggered by the bank and our life within the bank and our life within the bank? And I know I'm asking a tricky question because you see a lot of pickup nowadays on open banking, on accountancy platforms, e-commerce, but I don't see a lot of examples from within the bank.
Speaker 3:We have some banks that launched in their mobile applications account aggregation service. So I'm the client of Bank A and in my mobile app I can add my accounts at Bank B and C and have a centralized perspective of my funds. Let's say so. This is the use case we have seen. Also, we have a collaboration with one bank in Romania that will launch in the I think three months from now, a top-up service, a payment service, using our infrastructure, also for e-commerce.
Speaker 2:Okay.
Speaker 3:So yeah, we start to see some new spaces.
Speaker 2:Do you think that banks will be triggered by because now we have PSD2, psd3 is coming. Do you think banks will be triggered by the new legislation or what would you see are the changes because of PSD3 is coming? Do you think banks will be triggered by the new legislation or what would you see are the changes because of PSD3?
Speaker 3:In my perspective, PSD3 and PCR will not generate a revolution.
Speaker 2:It's evolution, not revolution, exactly.
Speaker 3:I mean there are not, and even now, those extra things that are not working and are very important for the customer experience.
Speaker 2:Like consent.
Speaker 3:Yes, are not very let's say, are not very clear in the legislation. I mean, legislation can solve a lot of pains, but not all of them. So somehow, in order to make it work and become a mass success, the market has also has to, has to generate demand for those services, because the market will will generate, motion will will do you?
Speaker 2:FIDA will make a change Because there's the notion that more financial data should be shared amongst each other. Do you think that will make a big difference?
Speaker 3:Yes, I think open finance will mark an important moment when it will happen, but I think there are still steps to be done before open finance. I don't see it happening, let's say, before 10 years from now. I mean with legislation being in place and after that analyzing and multiplied in the country. So it's something like that in my view.
Speaker 2:Anna, you mentioned that you're very focused on Romania, but you also said you have a passport, so do you see any opportunities for you, as a Romanian company, to also help the rest of Europe?
Speaker 3:I think yes, but at least for now, our mindset is growing in small steps, but in, let's say, that are focused on quality. So I don't I'm not saying if this is the good or the not so good recipe, because there are a lot of open banking providers across Europe, in different stages, with different missions and so on, and we have seen both models growth model and so on. So, yes, if our strategy would be to expand in Europe, we will do that in very niche steps, focusing one market at a time.
Speaker 2:Because in your story it sort of stands out that the fact that you're so much connected with the Romanian banking industry has been very much working in your favor. Well, today, coincidentally, truelayer announced a 50 million additional funding and if you look at the small letters, it's to basically finance for the losses that they're making today. How? How do you see that, compared to the big company, with 50 million versus?
Speaker 3:you being very agile sorry, no waterfall here agile in the romanian market? Yeah, yeah, he is a is a difference, for sure. And even if we are looking at Visa and Mastercard, for example, that are the monsters from the payment landscape and they acquired open banking providers. So, yeah, it will be a very interesting game. Let's say.
Speaker 2:Maybe before we move a little bit more in what are the trends and what we see around us as as a company. In your name there's fintech and you're a licensed company. Do you see yourself more as fin or do you see yourself more as tech, and why?
Speaker 3:I think we have started being more as a tech because we, as co-founders, our background is a technical one. So, delivering services, delivering mission critical project in financial landscape from tech movie.
Speaker 3:And for some time we are more focused on thin approach, let's say, and not only thin, but also the product development, the customer mindset, all that journey that has to be in the center of what you are doing. That has to be in the center of what you are doing. Okay, you are building great products, security standards, everything is very good from technical perspective, resilient architectures, let's say but you need to make sure that the product you are building is suitable for the customer and brings added value. So this is what we need to.
Speaker 2:I think you described very well the balance that every financial institution is dealing with. It's how to be relevant for the end client, but still you need to be compliant with all the rules and regulations.
Speaker 3:Yeah, we learned that on our own skin that you need to be focused, not okay, technically, the prerequisites, but the customer and the added value is what you need to have as primary focus.
Speaker 2:We mentioned already the new legislations that are coming, but what do you really see as being the future of open banking in the next two to three to four to five years?
Speaker 3:I think we will still see an organic growth, because the growth we estimated, let's say, five years ago, didn't happen. People had some, let's say, more optimistic expectations from open banking a few years ago. I think is a baby step growth, so I don't think we will. Maybe in five years we will see, let's say that a critical mass has been reached, but it will not be a boom. In my opinion, it will not be something that will explode overnight.
Speaker 2:Does it require any new legislation to make that change?
Speaker 3:I think what is really needed is a good monetization model for the banks.
Speaker 2:Elaborate maybe a little bit more Now. We have to take notes. This is important yeah.
Speaker 3:I would have liked to have the magic recipe, trust me, but I think legislation has some limits. No matter how much will set the playground if the major players will not have, let's say, a balanced way of sponsoring that change it's very hard to trigger innovation. By fear, I mean with a stick. So that's why I think the….
Speaker 2:Some say that self-sovereign identity is the magic trick that open banking needs. What is your view on this?
Speaker 3:I will be honest.
Speaker 2:Please.
Speaker 3:I think the impact will be an indirect one because, with the shared identity and that ownership of my own data, that will open, let's say, will open the doors for a new paradigm in which the customer is in the center, he owns his own data, but he needs to know and to understand that he has this right, he has that power, and that is connected to the financial education. So I think it's a more complex chain that needs to be built in order to educate the customers, to make them understand that they own the data.
Speaker 2:It's a level of responsibility.
Speaker 3:Exactly and it's safe to trust. Let's say it's also a trust matter here. In order to share your data, you need to trust the institution you are sharing your data with. I think the impact of that will be on account interrogation approach For AISP service. Now the customer, via Open Banking, can share their account data with the Open Banking provider. It's a limited set of data that can be shared. It's an account interrogation history at that moment that must be enriched once Open Finance comes into force. Okay, now only payment accounts have to be available through Open Banking, but still the users are reluctant to share that data. So we see that not on payment, but on AISP services and we are trying to build the trust. For example, we have one major partner that is using our service for the account interrogation.
Speaker 3:It's a major accounting platform in Romania it's the biggest one. They have around 100,000 clients and they are providing account interrogation for their customers in order to see in the accounting platform, an automated dashboard for the financial situation for medium small medium enterprises, and the customers are asking for that feature and we receive emails from end customer and customer is a company that is asking to have access to that service. So once the end user understand that he can benefit from that service, either in terms of time or money, he will come and ask. And once the digital wallet will become a norm, I think that will help build that trust Because we will share data anyway.
Speaker 3:So, indirectly will impact also open banking.
Speaker 2:I find it funny that you bring in the element of trust, and the reason why I find it funny is because the whole idea about a wallet it's all about trust. It's the fact that you are able to grant your trust to somebody else. But it's an interesting angle that there is always a third party, and I think the regulation is trying to overcome that with DGA, for example, and the Digital Governance Act, but it's very early days. I agree what you see open data becomes collaborative data. Is that the same view that you share, or how do you see it? Collaboration versus open data, what's the difference?
Speaker 3:It's a complex.
Speaker 2:Uh, it's a complex question we're at the future in the trance. So it's not an easy one.
Speaker 3:Yeah, it's it's always, it's always difficult. Speaking about the future, um, I think I I'm more in the open data space that, at the first, is somehow regulated and, let's say, controlled in the early stages, and then build a much broader model. So my view would be first to speak about open data step by step, industry by industry, in a more controlled model, let's say, because when talking about open data, you need to take care about security, encryption, storage, who is accessing the data, how you control the access to the data, standardization, the access to the data standardization.
Speaker 2:You brought it up a few times baby steps and I think I like that approach. Maybe not to talk about baby steps. What do you see?
Speaker 3:the influences that Romanian fintechs can have on the rest of Europe.
Speaker 3:I think, each country in Europe might have equal influence when it comes to fintech space, for example. This is a tiny example, it's just a brick. Let's say it's a piece of. We were very much involved In EDFA. We have working groups and in the working groups, each country has the opportunity to involve and build a voice that have direct impact, let's say at European Commission and so on. For the PSD2, we could build feedback. We had meetings with the FISMA representatives. We could I was in the European Parliament and discuss about open items and obstacles.
Speaker 2:So you were in Brussels. Yes, ah, that's my country?
Speaker 3:Yeah, open items. And so you were in brussels. Yes, exactly yeah, and yeah, this is a great opportunity to actually discuss about real problems not the one on on paper.
Speaker 2:So I think yeah is but it's nice to hear that there's a lot of collaboration happening between fintechs and financial institutions. I think the organization ADFA is also an example that brings fintech associations, that brings us here around the table. What are your expectations towards the Milan Fintech Summit for the next couple of days?
Speaker 3:I'm very curious to be honest. So I don't curious to be honest, so I don't know what to expect. I'm usually not a person that sets, let's say, expectations, and I don't think too much what will be, and so I'm more into okay, I will see. But I expect, let's say, at a high level, I expect to see a vibrant community. I mean, my perception is that there are a lot of players that are shaping the fintech ecosystem in Italy as well.
Speaker 2:Interesting, so would Italy be the next country for you after Romania. I don't know, I'm trying to get commitments here.
Speaker 3:To be honest with you, we tackled the opportunity to expand in UK as the holy grail of open banking and we had some meetings in UK but still no decision taken.
Speaker 2:Well, anna, we're almost at the end of this interview a long interview so thank you very much. But before I let you go, I think you own it to the listeners that you tell them where they can find you if they need to know more about open banking and fintechs in romania. So where do they contact you?
Speaker 3:um my email address or my phone that's a good start, because yeah to be more efficient, more simple, more pass-through. So can I say my email.
Speaker 2:Yes, of course.
Speaker 3:So it's Ana Maria Giorgescu around smartfintecheu.
Speaker 2:I'm sure they will find you. So thank you very much for joining us for this interview. Thank you also to the listeners and please stay tuned because more news to come from the Milan Summit, Fintech Summit here in Milan live. Thank you very much.
Speaker 3:Thank you so much.
Speaker 1:Thanks for listening to another episode of the Connector Podcast. To connect and keep up to date with all the latest, head over to wwwjointhekonnectorcom or hit subscribe via your podcast streaming platform.