At the FinTech Talents Festival in London last week, fintech futures I sat down to speak with Griffin’s Chief Commercial Officer, Adam Moulson.
Griffin is an ambitious bank for fintech, founded in 2018 and headquartered in London, UK. Moulson himself joined the startup about two years ago. Prior to joining Griffin, he co-founded the paytech service Form3, where he held various positions at Swift for nearly 12 years.
In this discussion he fintech futures Learn how Griffin’s banking license approval is progressing, what sets Griffin apart from other banks, and the company’s future plans.
FinTech Futures: Tell us a little bit about Griffin. Also, how did you come to join this startup?
Adam Moulson: Griffin is a new bank under construction in the UK. [in the process of] Get a full UK banking license. Our aim is to serve fintechs and make their business more interesting and viable.
All fintechs that offer financial services and regulated products should themselves be regulated. They have to work with banks. That’s why we built a bank dedicated to fintech. We want to make banking as easy as possible for fintechs, both from a technology perspective and a business model perspective.
The company was founded about four years ago. During his first two years, he did a lot of research on the market and customer needs, looking at what other providers offered and trying to come up with a meaningful value proposition.
After two years of research, I joined the company and have been working on this research ever since. Building a bank is very complicated and takes a lot of time, a lot of thought, a lot of effort and a lot of money. We are not yet regulated as a bank, but we expect and hope that will happen in the coming months.
What was the banking license application process like?
As a process it is very interesting. Because, like any business, you have to build very interesting business models that solve real problems in the market. We have to do it in a way that creates a sustainable business.
What’s really interesting about going through the bank’s approval process is that you have to go into a lot of depth to think about it. Come to think of it, regulators don’t want new banks on the market if they aren’t. I properly thought and imagined all these different things that could be right or wrong.
By its very nature, there is no specific timeline in which to work. There is no date by which it must be done. So this is a very collaborative process between ourselves and the regulators until we are both satisfied that this is something we can do and that we can do with low risk. And hopefully the license will be issued.
Are you currently operating under a restricted banking license?
No, we haven’t actually reached that stage yet. In the next stage, a license will be issued, but it will operate on a restricted basis. Then operate on that basis for a few months, and then finish that period and allow it to be fully operational.
Again, a very interesting process to go through to demonstrate that everything is working. We don’t want to introduce risk once we enter the market. In reality, we want to reduce risk and manage risk. What we’ve done in the company’s history is we’ve built some technology products that are part of the bank and made some of those technology products available in the market.
For example, one of the biggest challenges facing banks and fintechs is managing risk and financial crime. The way Griffin is trying to solve this problem is by making financial crime and risk management a core part of its product offerings to its customers. We actually help them manage their risks and actually reduce ours.
We do this through our suite of financial crime technology and compliance teams. That’s why we’ve made our customer onboarding platform available to automate the onboarding of UK consumers and businesses. This will allow you to bring your product to market and start building relationships with your customers.
Please tell us more about the product you are trying to offer.
Our target markets are all regulated fintechs and future embedded financial providers.
We are required to work with organizations that are responsible for managing customer money, but do not have the authority to hold customer money. Banks are the only places where you can keep your money, so we offer a large number of accounts.
For Fintech clients, we provide checking accounts to hold operating funds. We can also provide you with a savings account for your own money. It also offers something called Protected Accounts. This is a segregated protection account for the money of fintech customers and keeps that money safe.
It also offers client money accounts. So, if you are in the fields of investment management, wealth management, or law, there are various laws that require you to keep your customers’ money with a bank in what is called a customer’s money account or cash account. This is a very special kind of banking product. It requires a great deal of specific knowledge and management of these products for the market. Essentially, we want to keep everything as simple as possible so that fintechs can come to us as banking partners.
For example, at this time, fintechs cannot offer interest-paying customers savings accounts. Only banks can. We want to help fintech companies do just that and bring those services to their customers. Therefore, it is our ability to provide credit to our clients in order for them to create credit and lending products for their clients.
We pride ourselves on being a community provider focused on the fintech ecosystem and trying to make it as easy as possible for them to operate in a safe and sustainable way.
How do you think Griffin is different from your competitors? What are your strengths? Why do your clients need to come to you more than anyone else in the market?
Fundamentally, we do not provide products or services to consumers or businesses. it’s not our job. We provide functionality to our clients. We want to help them serve their consumer and corporate customers.
Few banks are providing them with a foundation on which to build other businesses in a safe and sustainable way. This is what makes Griffin so unique.
Banks typically manufacture products for their customers, acquire those customers directly, and then offer those products to those customers. we take a different approach.
In terms of fundraising, how much have you raised so far?
It has raised approximately $28 million to date.
Do you have any plans to raise funds in the future? yeah, i will. But do it if you want. I don’t think we’ll be greedy, and we won’t raise a lot of money at too crazy valuations. We seek to build a sustainable, long-term business with a solid foundation based on value creation.
One of the interesting things about Griffin is that they build much of their core technology in-house. That’s why the core banking system is built by our engineers. He also invests a lot in product design and user experience, mainly software he is an engineer, making it as easy as possible for customers who are used to technology and technology integration.
A sandbox is already available. Our platform is free and available to everyone on our website. Therefore, anyone – competitors, customers, researchers – can visit our website and use this test environment.
Rather than forcing potential customers to try and sell something into endless conversations and meetings, we want to create an open environment for product managers and software engineers to try things out. Click the button and talk to us if you need help.
We just want to get out of the way for a moment. Provide the support you need, but avoid forcing yourself through the difficult process of working with your bank, as it is often very difficult to build a relationship with them.
The fintech market doesn’t have many choices about which banks to partner with. Some high street banks are working with fintech, but most are not. Companies working with fintech are very selective about which clients they work with. So even finding a bank willing to cooperate with you is very difficult, but this is necessary.
What are Griffin’s plans for 2023?
Some plans are already in place.
One of the initiatives we’re working on right now is getting hundreds of software engineers from the fintech community to enroll in a sandbox to prototype, test, and build the product that customers want and then bring it to the real world. It’s about trying to solve the problem.
At some point, we hope to obtain a license. We then work with a small number of customers to conduct pilot and proof-of-concept projects. It should be fully operational at some point next year.
Anything else you’d like to add?
I think there is a lot of confusion in the market about what is a bank and what is an e-money institution. Even at this conference, there is a lack of knowledge about these two basics of his business. I think people should be more open minded to learn what the differences are.
Another theme is financial crime and risk management. Many people think this is a technology problem. Yes, technology can help. But it’s basically about risk management. Managing risk requires expertise. You also need a really clear business model.
So the first thing you need to do is have people with the expertise and business understanding to help you come up with a risk-based approach. Then you can implement technologies to help manage it. And some of these aren’t really options.
And culture is probably another. When you start a company, whether it’s 5 people, 20 people, 50 people, or 100 people, you need to invest in a culture that actually helps and protects your business. Many companies don’t invest much in their culture.
Given the current market scenario, are you confident about the future?
I am very confident in Griffin’s value proposition and the value we create.
The general environment changed very quickly. The investment capital that the company expected to complete the funding round is running out, and the company is meeting its expectations. And that’s fine. There is nothing wrong with that approach. But when the market changes completely and the funds are not available, it’s as if all the rules of the game have changed.
Unfortunately, we’ve found some companies in a position where they’ve taken a lot of leverage and investment to grow, but the ability to bring in new money to those businesses is drying up. is a difficult time.