In the past decade, fintech (a label that blends finance and technology) has exploded onto the financial scene, transforming the financial services industry. More than 330 unicorn fintech firms are now utilizing technologies like artificial intelligence (AI) and blockchain to generate new ways of doing business and create exciting options for digital banking users. With 66% of customers expecting financial institutions to digitize their offerings, including sales, customer interactions and service models, this trend continues to create opportunities to shape and grow more inclusive and efficient financial services.
With more startups in the financial technologies space, and large financial institutions recognizing fintech’s value in creating new and improved financial services, the global fintech market is predicted to grow at a CAGR (compound annual growth rate) of 23.58% between 2021 and 2025.
In this exclusive interview, we talk with Damian Brychcy, the COO and Managing Director of Capital on Tap, for his insights on the future of fintech, the role of artificial intelligence and tech’s potential for enhancing customer experiences and discovering new customer segments. We also discuss Capital on Tap’s strategy for staying ahead of the curve.
How do you see the role of AI and machine learning evolving in the fintech industry over the next decade, and what impact will it have on Capital on Tap’s services?
“I believe the fintech industry is a natural winner from generative AI and machine learning in two key ways. Firstly, the fintech sector, a ‘heavy touch’ industry with a high level of customer interaction, can greatly benefit from generative AI, particularly when it’s trained on a company’s proprietary data and knowledge base. This enhanced capability leads to quicker customer service and provides a more personalized and premium customer experience, similar to a white glove service.
“Secondly, these technologies can help us reach previously untapped customer segments. They can help us identify new customers that traditional data methods may have missed. This can be through improved customer identification or refined credit underwriting processes, and help us expand our reach and serve a broader audience.”
As fintech companies continue to disrupt traditional banking, how is Capital on Tap positioning itself to stay at the forefront of innovation and maintain a competitive edge?
“The legendary CEO of Netscape, Jim Barksdale, famously said that there were two ways to make money in business, bundling and unbundling. Over the past 10 years we have seen a significant unbundling of financial services with fintechs playing the leading role. Each fintech specialized in one specific area, such as consumer banking, business credit cards or corporate expense management. However, we are now seeing the re-bundling of financial services with fintechs taking the lead.
“We believe that this re-bundling will happen across specific verticals or target customer segments and in our case, small businesses. Our aim is to continue expanding our payment and lending solutions, positioning ourselves ahead of the competition and providing comprehensive financial services to our customers.”
“Over the past 10 years we have seen a significant unbundling of financial services with Fintechs playing the leading role. We are now seeing the re-bundling of financial services with fintechs taking the lead.”With the rise of decentralized finance (DeFi) and blockchain technology, how is Capital on Tap exploring opportunities to incorporate these technologies into its offerings?
“We are not currently looking at DeFi. We consider DeFI as a solution that is yet to find a clear problem to solve. We are instead focused on how we can make the lives of small business owners easier. However, we’re open to the possibility we’re wrong on this subject.”
Cybersecurity and data privacy are critical concerns in the fintech sector. How is Capital on Tap addressing these challenges to ensure the safety and trust of its customers?
“There are two main things we do to address cybersecurity and data privacy concerns. First, we maintain transparent communication with our customers, explaining the measures we use to safeguard their accounts and providing guidance on how they can enhance their account security. We also conduct regular third-party security audits and maintain continuous monitoring of our platform to ensure it remains resilient against evolving cyber threats.”
Financial inclusion is a significant goal for many fintech companies. How does Capital on Tap plan to reach underserved markets and provide accessible financial solutions to a broader audience?
“Since 2012, our entire mission has been about promoting financial inclusion and catering to the needs of underserved businesses. The reason for our existence is based on the fact that traditional banks often struggle to serve small businesses. Most of these underserved segments are small and micro businesses that don’t have a lot of exposure to digital finance solutions and fintech. We believe we can play a key role in bridging this gap for the millions of small businesses in both the US and the UK.”
“Our entire mission has been about promoting financial inclusion and catering to the needs of underserved businesses.”
Regulators play a vital role in shaping the fintech landscape. How does Capital on Tap navigate the complexities of regulatory compliance while fostering innovation and growth?
“With more than a decade of experience operating in a highly regulated environment, we have developed our business to move fast while at the same time staying compliant. Our approach involves establishing clear and firm boundaries that define what falls squarely within our regulatory framework and operating environment. When an initiative fits neatly into that box, we empower our teams to move quickly. However, as soon as an aspect of a project approaches the boundaries we’ve set, we immediately pull back and get the right teams and experts involved.”
The COVID-19 pandemic accelerated the adoption of digital finance solutions. How has this affected Capital on Tap’s business strategy, and what lessons have you learned from this period?
“The COVID-19 pandemic has had no impact on our business strategy. We believe that simpler, faster, and cheaper digital tools will win against any previous solution for most customers. What the COVID-19 pandemic highlighted, however, was the adaptability of small businesses to move to new tools and systems extremely quickly if the viability of their business depended on it.”
“What the COVID-19 pandemic highlighted, however, was the adaptability of small businesses to move to new tools and systems extremely quickly if the viability of their business depended on it.”
Partnerships and collaborations are common in the fintech ecosystem. Can you share any insights into strategic partnerships that Capital on Tap is exploring to enhance its service offerings?
“We’re always looking for ways to make the lives of small business owners easier, either through direct solutions or strategic partnerships. Right now our focus is ensuring we’re connected to all of our customers’ business financial software, whether it’s bank accounts, accounting software, or point-of-sale software. We want Capital on Tap to become a comprehensive financial operating system for these small businesses. Much of our current efforts are dedicated to building and enhancing our service offerings over the next year or two.”
Summing up
The ever-shifting parameters and capabilities of fintech means that the future holds enormous potential for opportunities, albeit with some challenges. As technology continues to advance, fintech will play an increasingly important role in reshaping financial services and driving innovation that serves all kinds of businesses and individuals.
