Interviewed By The Asian Banker Live
Darren Taylor, chief designer of Clearly, gives a rundown on what the company aims to provide its partner banks – from different banking solutions to its servicing capabilities and new products as well as branding to target different segments.
Emmanuel Daniel (ED): I'm very pleased to be able to speak with Darren Taylor, one of the co-founding team members of Clearly, C-L-E-A-R-L-Y, Clearly, which is really like a “neo bank”. But when you say a neo bank, is that a core banking technology that banks use, or is it a bank in itself?
Darren Taylor (DT): Yeah, so, effectively, what we are is we're broader than technology. We're a full – a servicing bank. So, from a customer standpoint, we're a mobile first, digital-only bank. What that means −
ED: A digital-only platform?
DT: Yeah, we're a banking solution. We partner with banks, and the products that we provide you is what you would expect of a bank. So, we will provide you with all of your spending capability, all of your saving capabilities. And then we also provide you with blending, and we provide you with investment opportunities.
ED: Okay. And all of that is on the back of a general ledger (GL), or is that an accounting system that you provide, or is it a fronting system?
DT: So, we have the front-end. We have the channels. We have the core banking framework. And effectively, what we do is we interact with our banking partner. So, it's effectively, rather than having many, too many integrations, they have one integration, which is… I’ll let you level.
ED: Right. And the banks that you work with at the moment, who are they, and how many are they, and what do you do with them?
DT: Yeah. So, unfortunately, I can't answer the questions because we're still under negotiation with the banks. What I can say is we have many conversations going on. Some are with local banks. We've had interest from regional banks and also −
ED: So, when they work with you, do they incorporate you as a bank in a box that used to be that kind of a model or −
DT: Yeah, you can take that term. I think, again, it goes deeper than the bank in a box model. So, if you take like Fidor, they're working on the basis of “here's the technology”, which is effectively a bank in a box. But then that needs to be implemented by the partner bank, and then it needs to be run and serviced by the partner bank. And then it needs to be run and serviced by the partner bank. What we're doing is we're building a full-stack bank, all of the servicing capabilities, and from a relationship standpoint with the customer, we own that relationship whilst the bank – so, when I say we own the servicing of the relationship, but the partner bank, actually the customer sits with them.
ED: Okay. So, for the partner bank, what is the proposition of working with you, as opposed to having originated that relationship on your own? The whole idea of fintech and what your bank is supposed to do is onboard customers very quickly and large numbers of customers, using platforms like mobile and stuff. Is that what you do, or −
DT: Yeah. So, we tick those boxes in a sense, so we do onboarding, so it’s a customer acquisition, but we're a brand. We're effectively a banking solution for customers. We provide them all of their banking needs from spend, save, borrow, and invest.
ED: So, those are applications on your systems?
DT: Yeah, they're actually products. So, we have the product set, and we provide that as Clearly. We're providing that from a partner bank. We're saying, here's the bank. We've built it. We're not asking for any investment from you. But what we want to do, is have an integration which allows – from your standpoint, it gives you a whole new segment and brand opportunity. And from our perspective, it means that we've got the regulatory covered that is required to effectively run the bank.
ED: Right. So, if someone wants to start, originate a bank from nothing, would they come to you and say, "You have the platform. You can get us up and running tomorrow if you wanted to." Does that platform exist on the cloud −
DT: Yeah, it exists −
ED: or is it something that can make of a choice?
DT: Yeah, it exists, but effectively that's what we've built in a way that it brings the new bank to an existing bank today. So, effectively, rather than someone saying, "I want to build a bank. Can we utilise your platform?" and we provide the technology, what we're saying is, to existing banks, “There's a number of challenger banks coming up. There's a lot of fintechs that are starting to eat into maybe small margins, but they're taking a chunk out of your margins so it stands... “
"What we're doing is we're providing you a solution that gives you the best of breed across fintechs. It gives you all of the solutions. We're going to service customers better than anyone in the market. And so, we're going to work with you in a sense that we'll do a profit share, or we can do it in a model which allows you to pay for the acquisition and the servicing of the clients."
ED: Right. So, at which point do you become commercially viable? Is it the number of banks who become your clients or number of customers that you process?
DT: Yeah, it's to do with the number of customers that we acquire and the number of customers that we service. So, we have a distinct product set that we're offering. So, the more our customers are utilising our products, the more profitable we'll be.
ED: So, this thing about core banking systems, you have the old days where it's a monolithic infrastructure that a bank has to sort of set up from scratch, have hundreds of programmers and stuff. And today, you have core banking on the cloud. There are companies in Germany which – Mambu, if I'm not mistaken – so, how are you different from them? How much of you is a technology proposition, and how much of you is a −
DT: We're a full banking proposition. So, effectively, there are technology platforms. You can go out and buy them. You then have to integrate them. You have to put that infrastructure in place. You need to train all your people. So, you've got that whole change management and implementation, and its cost you. You've spent a huge amount of money to buy that.
Where we differ is we build everything for you. We've got a brand. We service the customers. We service them for our own channels. And we provide you a whole new brand which allows you to target a different segment from your mother brand. And we do that for free. And when I say we do it for free, is we don't require any investment from our partner bank. We just need the commitment that we can work with you and partner with you, and then we have a profit share with that partner.
ED: Are you more likely to succeed with real start-ups, people who – corporations or entrepreneurs who've already made it with money and who want to start a bank in a hurry than with a traditional bank?
DT: We don't think so. So, we think that actually the perfect partner for us is a traditional bank that has its own priorities and needs to focus attention on those priorities. What we do is we say we're effectively not going to disrupt what you're working on. You can stay true to your core principles and what you're looking to achieve.
But what we're doing is giving you another brand entity that allows you to get a segment of the market that you wouldn't have got before. And if you partner with us, then that's great because you get a share of that revenue, and the profit is generated. But that's −
ED: But in the marketplace, you will not end up having a brand of your own. You could be white-label −
ED: You are still Clearly, so you are −
DT: We will still be Clearly. So, the whole value in what we're doing is we're building a brand that resonates with people that's known for the service that we deliver, and rather than it's not a white-label product because effectively, all you're doing then is just adding something to your existing brand.
It's about having something different that you can put into the market that gets positioned as Clearly. And the service that we will deliver and the products that we'll deliver will be far superior, and we'll ensure that we get customer acquisition.
ED: But how it'll probably work out in each market is you probably have one Clearly partner, and then you need to go have one Clearly partner in every different market until you become a global proposition. Is that a goal?
DT: So, our current position is that we would sign one exclusive with a partner bank in each country. Where that's being put to the test is that we're also talking to some significant global brands, global banking brands. And in doing so, it may be that we go with one partnership that gets us into most countries.
ED: So, how do you, as a team, how do you envisage that big breakthrough where you become like the Visa of banking?
DT: Yeah, and it's not about being a Visa or a service provider in that sense. The big breakthrough comes, once we get our proposition out there, we get to actually demonstrate the value of that proposition.
What we're doing is we're going to be doing things that are faster and cheaper than anyone else. We're going to give access to particular products, specifically around investments that the market that we're after, is we're after affluent or mass affluent who have not really had access to before. So, by doing that, we're bringing some private banking products to that market, as well as servicing all of their…
ED: But, in terms of the proof of concept, doesn't that necessarily need to be you doing it on your own first?
DT: We do it – so, the way that we launch and the way that we're building Clearly…me as the chief design officer, effectively what we do is we work with customers on a weekly basis.
So, as we're designing a new product, as we're figuring out a customer experience or a customer journey, we build that out from four days of the week, and by the fifth day of the week, we're actually bringing in customers. We're testing it. We're sticking a prototype in their hands, and we're judging.
So, it's the way that we're testing the take-up and the interest in those products is through customer involvement. And I think what that gives us the advantage of is to ensure that we're validating and learning from the audience.
ED: In that regard, you're probably the kind of ideal type of model to be put into a regulatory sandbox, as the regulators call it, in that you're not yet a bank, and yet, otherwise, you would need the licences and so on.
DT: Yeah. So, what we're trying to do is ensure that –we actually don't want to go out and get our own licence. We want to build a partnership with a bank that has an existing licence. And what that does is it allows us to ensure that everything that we do is regulated and will be completely within the regulation of that bank and risk tolerance of that particular bank.
But what we do is we get to – we're designing this from scratch, so what happens with existing banks, they've been built over ten, 20, 30 years, and as they build out, that infrastructure gets fatter and fatter. What we're able to do is to basically make that as lean as possible and ensure that the customer's getting the most value out of the proposition that we put…
ED: Yeah. So, what are the features of that design? What do customers get out of it, like, speed −
DT: Yeah. So, account opening was one of the points I think you touched on. We're looking – at the moment, we have – the process that we've designed, effectively, you would be able to open an account with us in under two minutes, and that's not −
ED: Two – under two −
DT: Under two minutes.
ED: Two minutes.
DT: Yeah, so that's not an account, we've opened it in principle; that is we've opened an account, and here's your account number. At the moment, there's no one in the market, in this market that's able to do that.
If you look into the UK, Germany, you've got the likes of N26, about eight minutes. You've got Monzo, who are, I think, less than two minutes. I've seen they're able to get it into under 30 seconds.
But we've really looked at, how do we build the process? All of that information's still required, but there's multiple ways to gather that information. And the least convenient way is to ask the customer for readily available information.
So, we get the call information that we need from that customer, and the rest, we have contracts with the various fintech companies that do KYC, that validate documents, and we ensure that we can open the account very, very quickly.
ED: Thank you very much, Darren and, well, it'll be interesting to track, who are your investors?
DT: We have a mix of investors, but we primarily have institutional investors from the US.
ED: Okay, great. Thank you very much. Cheers.