Käärmann at MoneyConf 2018

TransferWise co-founder and CEO Kristo Käärmann has revealed how the combative fintech firm might just have a secret soft spot for major banks.

TransferWise recently inked a deal with France’s second-largest banking group, BCPE, which will see the group implement TransferWise into its mobile banking app from 2019 onwards.

It was a huge statement of intent from the French group, considering that TransferWise made its name undercutting banks on fees.

It’s not the first time that a bank has utilised the fintech firm, though. Käärmann said that Hungary’s Axis Bank had been responsible to an anomalous increase in Hungarian users of TransferWise. The bank had worked out that forex was too expensive for it, so directed consumers elsewhere.

“Banks are so multi-product, it’s not easy for them to figure out the cost of their international transfers,” said Käärmann. Since much of the data can be siloed away in branches it’s easy to miss.

Once a bank realises the costs, he added, they quickly identify services which are actually very expensive to run – services that could be better shipped off to strategic fintech partners.

Banks used to be dismissive towards their lesser cousins, said Käärmann, yet now they’re realising that not all fintechs are here to displace them and are more than happy to collaborate.

TransferWise handles more than $3 billion in payments, yet has yet to even “scratch the surface” when compared to major banks, added Käärmann, in a surprisingly humble admission.

Just like in Hollywood movies, the grizzled cop of banking and the fintech recruit will learn they’re better off working together than butting heads.

by Alex Hamilton
Alex is Senior Reporter at IBS Intelligence, follow him on Twitter or contact him at: alexanderh@ibsintelligence.com