Automation of corporate financial operations in Europe - Interview with Cosmin Cosma, founder of Finqware.

Finqware is a Romanian startup company specialized in the integration and open banking applications. In June 2022, the startup received approval under the European PSD2 regulation to operate in all 27 EU countries to report bank statements and capture payment orders for its business customers.

We spoke to Cosmin Cosma, founder and CEO of Finqware, about his upcoming business plans and his new product.

Hi Cosmin, you are the founder and CEO of Finqware today, but we are curious about your background. What experiences led you to become a tech startup entrepreneur?

By the time I graduated with my bachelor's degree (in philosophy, by the way), I started my first career steps in a telecom company (Zapp). That was my first encounter with high tech, as I learned about, understood and promoted cutting-edge data transmission technologies. After 4 years, in 2005, I got my first job in banking as ING Bank Office Owner and Manager. The funny thing is that I did not get into banking because of my love for numbers, money or banking, but because of my inner desire to build businesses as an entrepreneur. Starting a franchise branch of ING Bank was a great opportunity and turned me into a doer. Two years later, after establishing a good business and attracting 3000 bank customers to the office, I decided to make my first successful exit and sold the business to a buyer. The ING Dunarea office in Galati, one of the main franchise offices of the bank, can still be visited. Later, I returned to the corporate environment where I held various management positions in banks ( GE Capital, Garantibank and Volksbank), and in 2013, after completing my Executive MBA degree (at Asebuss/Kennesaw State College, Atlanta, USA), I returned to entrepreneurship and founded several companies (including another successful exit from a financial company I had built from scratch as co-founder and CEO). Then in 2018, I started the Finqware journey, which I consider my biggest professional project to date.

What problem does Finqware solve and how would you say it alleviates your customers' problems?

Traditionally, large companies around the world have struggled to integrate banking data and operations into their financial management. Whether it's paying suppliers or employees, reconciling accounts, collecting customer payments or analyzing cash flows, hundreds of hours of manual labor are invested each month to deal with the lack of standardization of formats, delays in data availability or missing information.

In medium to large companies, a full-time employee may be busy downloading data, organizing the files, and importing them from and into banking applications, ERPs, collections, or billing systems. Global companies have entire teams with dozens of employees manually dealing with the reconciliation processes.

We strongly believe that APIs will significantly change the way B2B banking services have traditionally been delivered. B2B API platforms help banks deliver transactional services to their customers and partners as standalone operations, and embed this functionality seamlessly and securely into customer workflows.

Finqware is building one of the world's first enterprise Open Banking platforms. Our goal is to put Open Banking and PSD2 regulation into practice and leverage their benefits for business process automation.

Our vision is to make Open Banking and APIs the preferred banking connectivity solution for businesses of all sizes, relying on our own API aggregation infrastructure. As a result, we ensure comprehensive banking coverage and full-featured connectivity, including both regulatory APIs and premium banking APIs, in every country where we have a presence.

The Open Banking license that Finqware has received is a passport to access the entire European market. Have you already started to generate traction around it?

We officially received the payment institution license at the end of May 2022. Operationally, we went live with the license on July 15, 2022, and are now in the process of signing our first corporate customers. We already have a waiting list of more than 20 customers who have tested and used the FinqTreasury platform even before we could enter into a commercial engagement with them, and we expect to convert the test projects into paid engagements very soon. On an international level, we are already preparing to open our first external sales office in Luxembourg, which is scheduled to start operations in September.

In your opinion, what qualities are essential to be successful in the fintech sector?

In the Fintech sector, as the name suggests, you need to combine two important areas of knowledge: a deep understanding of the financial industry from the inside, to understand the gaps that a startup needs to cover, and very good technological knowledge and execution skills to use the latest technologies. In addition, you need an already existing network and references in the financial world, with some "gray hairs" from the industry to accompany the project to advise and open doors to big names in the field. Fortunately, Finqware's founding team and advisory board cover these areas quite well, laying the foundation for the company's future success.

What's happening in the industry you are in? What are the most important trends?

Open banking is going to become mainstream. Regulators are already very focused on making it work, banks are already starting to see the incentives to push it, and most of the new fintech projects have Open Banking as a fundamental technical layer. We are focusing on a niche segment that some would call the most difficult to serve - corporate customers - and assuming an even more pressing change, the revolution that API real-time connectivity means for enterprise cash management. Open Banking is a technology that opens the door to a major shift in financial management, and we are here to drive that change, and aspire to lead it, at least at the European level (in this way, we are starting to open offices in locations such as Luxembourg - one of the most important European locations for the financial industry).

What is your biggest challenge in scaling?

The biggest challenge for the company is the very slow pace of change in the financial ecosystem. While everyone knows the direction things are going, change is always very slow, as banks and large companies only move towards innovation when they are forced to by regulators, customers or the market. In the meantime, a company like Finqware must ensure its survival through funding from external sources in order to be on top of the wave when it reaches its peak.

What is the most important lesson you learned as the founder of Finqware?

That persistence is the most important trait of a founder. When building a company with big ambitions, you have to have the attitude of a child building a big and complicated Lego set. You have to have patience to put the pieces together brick by brick. When you realize that you are not on the right track, you take out some pieces and start a new phase. While building, sometimes you can not see from the different parts the overall picture of the final toy you want to build and whose image you have in mind (on the box of the set). But if you build with drive and passion, you do succeed in the end. And you create something valuable and are proud of it. On the other hand, if you give up, all the parts are worth nothing.

Also, I have learned that if you want to build a great company, it's better to be the tortoise than the rabbit. Especially in fintech, you need to lay a strong foundation before you start anything. Otherwise, you can see a lot of down rounds these days. The stars of yesterday, who were able to raise a lot of money very quickly, usually fade away.

Where do you see Finqware in 3-5 years?

A large European fintech company founded in Romania with a possible valuation of more than $1 billion. An "inorog", if I may use the Romanian word for unicorn.

What makes Finqware so special? Why should investors choose you?

Investors should make their bets based on their criteria. And I have learned that there are a lot of variations in viewpoints. Finqware has a number of hard-to-replicate competitive advantages (deep technology developed and proven over the last three years, a team with the best industry knowledge in the region, an EU-wide license granted after a nearly two-year approval process, and a product that has already been validated in the pre-launch phase with large, important real-world customers). But most importantly, we have a great team with a mission to make things successful. Interested investors will choose us because they do not want to regret later that they missed the opportunity to be part of our success.

Thank you Cosmin! Learn more about Finqware's round here.

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