With eight years of experience working for Microsoft behind him, Flavien Charlon co-founded Trezeo in 2016. The financial platform offers income-smoothing services marketed towards the self-employed and also provides emergency credit for subscribers. Leaders League spoke to Flavien about working with traditional banks to ameliorate Trezeo’s services and the future of the Fintech market.
Leaders League. Why did you decide to found a financial platform specifically for self-employed workers?
Flavien Charlon. Initially when I came together with Garrett (Cassidy, co-founder) we wanted to build something around digital banking for small businesses, so we started to do market research. At the time, around two years ago, there were a few challengers and neobanks offering services for individuals, like N26, but there wasn’t really a strong offering for small businesses.Small businesses were like the middle child, they were being left behind by traditional banks.
However, we soon realized that just offering a standard bank account, with a mobile app wouldn’t actually solve the key problem for these small businesses. We found that cash flow management was more of an issue, in particular when it comes to self-employment. These people can find it hard to predict how much income they will receive in a given month or week, as they aren’t offered a great solution they tend to use overdrafts, credit cards or loans from friends and family. That is how we came to the idea of Trezeo, providing income-smoothing, helping people manage their own money and offering credit as an alternative to overdrafts and payday loans
How has the financial world, especially traditional banks, responded to Trezeo?
So far, they tend to be interested. There are different possibilities for partnering and we could look to offer other products such as mortgages through these partnerships. Self-employed people can struggle to get mortgages as they often don’t have a stable income and banks tend to favor employees as the risk for them is much lower. We could work closely with the bank and use the data we have to reduce risk. We are currently being supported by the Bank of Ireland, they have a startup program called Startlab which we are a part of and they offer office space, mentoring, connections and other help. Banks generally tend to be open to Fintechs nowadays, they see the potential for partnerships rather than competition and we have had generally positive engagement.
The Fintech world is currently booming, with AI being used as a financial tool and traditional banks investing heavily in the sector. What do you see as the key Fintech trends for 2018?
I think AI certainly has a card to play, for things such as credit-scoring and also through key new channels such as voice assistance which Fintechs and banks can use to engage with the customer. One of the trends which I’m really interested in is open-banking and the open APIs* around it. Open banking is a form of open API mandated by the FCA* in terms of third-party access to user data and we are using it in Trezeo so that when a user signs up we can ask permission to access their transaction history in order to understand their income pattern. More generally, APIs linked to banking data will become very interesting because many recent banking inefficiencies have arisen due to a lack of transparency. Things like exchange rates and using credit cards abroad can incur unknown costs and I think open APIs will tackle this because Fintechs can use them to improve the customer experience, as has happened in the case of foreign exchange with startups such as CurrencyFair and TransferWise.
* API = Application programming interface
* FCA = Financial Conduct Authority