The Connector Podcast - Milan Fintech Summit: Journey from Intrapreneur to Co-Founder in Open Ban...

Welcome to the Connector Podcast, an ongoing conversation connecting fintechs, banks, and regulators worldwide. Join CEO and founder Koen van der Hooijdonk as you learn more about the latest available trends and solutions in the markets.

Welcome to another Adva 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?

I'm Anna. Anna Maria Georgescu is a long, a little name. Exactly. I am 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 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, 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.

No.

Or it's not even important, it's not even a secret. Exactly.

We're here in Italy, so they don't know 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 a period in which everybody was very astonished by the corporate dream. I decided to stay. 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.

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?

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. The roles were fewer, simple, everything was different.

So, no agile?

No Agile, just waterfall.

Just waterfall.

It's not bad. We can debate.

You're triggering 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?

I will tell you a dirty secret that everybody has.

Everyone, dirty secrets.

Dirty secret. My background was not in a technical university, it was in a business one. I had some—

But then I have to take all away my questions?

No, not necessarily. 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. It was hard at the beginning. So, this is the second milestone I say because I struggled 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.

Yeah.

And 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. You have to be very resilient, I think, and persuasive even if you don't have answers.

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?

A little bit, yes, because in IT Smart Systems I became to be responsible for some areas, let's say completely responsible. So, somehow the training for ownership or for assuming and taking responsibilities was 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. We were 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 wall, let's say.

You were at the banking side?

Exactly. We were at the banking side and we identified— 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.

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?

Yes, I think so. Yes, for sure. Yes.

And if you, 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 hubsva, the willingness to become an entrepreneur. Is it something that was always there, maybe because of your studies?

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, I think.

And you have been part of 2 different industries, telecom And finance on the other hand, how do you see both together? Are there similarities or are they exactly opposite from each other or something in the middle?

I think that on one hand, the telecom, I think they are bounded, 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. It's very important in the financial sector to comply with, let's say, security standards. standards or encryption or other innovative methods that— and these methods are also used by telecom companies that are using those innovations to protect their communication channels.

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.

Yeah, and there are many other, for data protection, for example.

GDPR.

Yeah, exactly. It's something quite shared between them.

No, no, absolutely. Well, 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 achieved? What is the model that you apply as a company?

Yeah, of course. So, in 2019 we opened the company. It was a struggle to obtain the license, the open banking license. In Romania, the PSD2 directive was translated into national law. legislation a little bit later than other European countries. So, in 2021 we took the license, 2 years after.

Did it take you 2 years to get the license?

9 months.

9 months, that's fast.

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 compliancy perspective. Then we worked for the authorization documentation a couple of months, I think. Then sent it to the National Bank and then the entire end-to-end project with National Bank of Romania took 9 months. Initially, we got the payment license. We took the payment license and after that we took the account interrogation license.

So, you started from the top, as they call it.

Yes, and it was easier when getting the second license. It was easier to obtain account interrogation.

Because 9 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?

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.

So, that is the idea of passporting.

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.

And do you actually use the fact that you're passported in other countries? Do you take benefit of that?

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 make the— 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 markets. 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 in 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.

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?

So, it's a, let's say, complex work here.

We like complex work.

Yes.

Yeah, we do like that.

Yeah, and just a short intro. Open banking was something that was launched by European Commission as mandatory things 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. 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, it's 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, 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.

Could you share with us some live cases from the banks in Romania?

Yes. First of all, the quality increased a lot in the last 2 years because—

And 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.

It enables beyond banking almost, right?

Yes.

Oh, sorry, embedded banking. 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. And so, in those 2 years, we have seen major improvements. Still needs to be— steps need to be done. So, I have to admit that.

Do you also have examples that are triggered by 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.

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 I had 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, 3 months from now a top-up service. A payment service using our infrastructure also for e-commerce.

Okay.

So, yeah, we start to see some use cases.

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?

In my perspective, PSD3 and PCR will not generate a revolution. It's—

Evolution, not revolution?

Exactly. I mean, there are not— and even now, those extra things that are not working and are very important for the customer experience—

Like consent?

Yes. 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 also has to generate demand for those services because the market will— will generate motion.

Do you think FIDA will make a change? Because we've— does the notion that more financial data should be shared amongst each other, do you think that will make a big difference?

Yes, 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.

Well, 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?

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'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 would do that in very niche steps focusing on one market at a time.

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 do you see that compared to the big company with $50 million versus you being very agile? Sorry, no waterfall here. Agile in the Romanian market?

Yeah, it 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.

Maybe before we move a little bit more in what are the trends and what we see around us, 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?

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. So, we came from tech movie and for some time we are more focused on Fin approach, let's say, and not only Fin but also the product development, customer mindset, all that journey that has to be in the center of what you are doing. Okay, you are building successful, you are You are building great products, security standards, everything is very good from a 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—

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.

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.

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 2 to 3 to 4 to 5 years?

I think we will still see an organic growth because the growth we estimated, let's say, 5 years ago didn't happen. People had some, let's say, more optimistic expectations from open banking a few years ago. I think it's a baby step growth. So, I don't think we will— maybe in 5 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.

Does it require any new legislation to make that change?

I think what is really needed is a good monetization model for the banks.

Elaborate a little bit more. Now we have to take notes. This is important.

I would have liked to have the magic recipe, trust me. But I think legislation has some limits. No matter how much we'll 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—

Some say that self-sovereign identity is the magic trick that open banking needs. What is your view on this?

I will be honest.

Please.

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.

It's a level of responsibility.

Exactly. And is safe to trust, let's say, is 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, let's say, a limited set of data that can be shared, this 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 their 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. 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-sized small-medium enterprises, and the customers are asking for that feature, and we receive emails from end customers. End customer is a company that is asking to have access to that service. So, once the end user understands 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. So, indirectly will impact also open banking.

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, 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?

It's a complex question.

We're at the Future in the Trends, so it's not an easy one.

Yeah, it's always difficult speaking about the future. I think I'm more in the open data space that at 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.

So, yeah, you brought that up a few times, baby steps, and I think I like that approach. Maybe not to talk about baby steps, what do you see the influences that Romanian fintechs can have on the rest of Europe?

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 has 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 discussed about open items and those topics.

So, you were in Brussels?

Yes. Ah, that's wonderful. Exactly, yeah. And this is a great opportunity to actually discuss about real problems, not the one on paper. So, I think, yeah, it's—

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?

I'm very curious, to be honest. So, I don't know what to expect. Me, as I mean, I'm usually, I'm 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.

Interesting. So, would Italy be the next country for you after Romania?

I don't know, to be honest with you.

I try to get commitments here on paper.

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 the UK, but still no decision taken.

Well, Ana, 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 owe 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?

My email address or my phone.

That's a good start.

Yeah, to be more efficient, more simple, more pass-through. So can I say my email?

Yes, of course.

So it's Anna. I don't know how to say English or.

annamaria.georgescu@arondsmartfintech.eu. 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.

Thank you so much.

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