When retail meets FinTech: Interview with Nigel Verdon, CEO, Railsbank

By Gaia Lamperti

It is exciting times for Railsbank, the leading global embedded finance platform, which last week during the Money 20/20 conference in Amsterdam announced a new partnership with QNTMPAY and McLaren F1 to support upcoming product and services launches in the UK.

The partnership will offer rewards and exclusive experiences to McLaren fans, driving engagement and loyalty. It will also see the launch of McLaren Mastercard branded debit cards, setting the benchmark for embedded experiences to tap into the £8.5 billion ‘fan economy’ in the UK.

IBS Intelligence sat with Nigel Verdon, CEO at Railsbank during the conference to get more insights on the announcement and the global shift towards embedded finance.

How do you feel about the recently announced Railsbank’s partnership with QNTMPAY and McLaren? 

We’re super excited to announce something we’ve been working on for so many months! McLaren wanted to focus on their fan base, so we looked at ways to engage with them via QNTMPAY, who are the digital banking partners of McLaren and ourselves. We worked together to understand what the McLaren fans want, what they get excited about and how to make that a factual experience. This also means that McLaren can get real-time data on consumers, so that’s the reason behind bringing the three of us together, to focus on the fans of the brand.  

Will you be expanding the service outside the UK? 

McLaren is a global brand but it started in the UK, so we also started in the UK. We will surely also expand out the relationship to support McLaren in Formula One sports and e-sports, engaging all the different fanbases. The initiative will have a global foundation, but we had to start somewhere.

Beyond this partnership, Railsbank’s global Open Banking platform is powering many more products and experiences for financial services providers. Would you tell us more about the sector’s sentiments towards Open Banking right now?  

Sure, let’s start by saying that it’s not actually all about APIs. Because everybody has APIs now, banks, platforms, they all have APIs, and they’ve just become a way of accessing the services you need. What we believe is that Open banking is about looking at the consumer. For example, consumers buy cars, they don’t buy car loans. So, you need to use your APIs, your tools, and your financial products behind the scenes to assemble such an experience that, when a consumer buys a car, the loan comes with it without having to go to somebody else’s experience and filling forms and all of that. So that’s what embedded finance is really, sort of a further extension of what has done in the past Open Banking. It’s opening up finance and bringing it directly into a consumer’s experience. At Railsbank, we are leaders in having the right tools to build those experiences for our customers. So that’s where we see the future is: creating toolkits to allow experiences as opposed to bank account maintenance.  

Indeed, one of Railsbank’s main assets is a ‘super simple’ API, very easy to integrate. How does that simplify processes?  

We adopt the concept of human-centric design, which consists in designing products that people can really engage with because they are simple to use. So, in the API case, this means using terminology and phraseology that your grandmother could understand, not just an engineer or technology person and that’s what makes our APIs simple. I mean, they can be copied but what counts is the real intellectual property of Railsbank: super simple APIs with no legacy between us and the central bank, no legacy between us and the payments schemes. So, we have essentially removed the banks’ gatekeepers and connected the consumers to central banks or payments schemes and that allows our customers to deliver engaging experiences with their consumers.  

Why has embedded finance increasingly become such a priority for brands?  

Well, I think FinTechs were the first to explore it and then also the tech giants like Google, Facebook, Amazon started to look at embedded finance, today emerging digital retailers and brands, like McLaren, are also into it. Retailers are actually super interested in FinTech today because they say they can get better, faster engagements. So, I think there’s a coming together of these two industries, retail and FinTech. And why is it important? Because this allows any brand to engage more deeply and to have a bigger digital grip on consumers.  

How much of a role has the pandemic played in accelerated adoption?  

We can say it was one of the unintended good consequences. The pandemic has really pushed the digital agenda. Banks have realised that if they don’t spend millions on digital change projects, they are going absolutely nowhere. That also caused a shift in regulations. In the Philippines, for example, there has been a change of regulation to enable digital banking. So, now the sector is thinking more seriously about what digital means and the importance of having platforms with digital frictionless processes, customer engagements, and seamless experiences. It’s all stuff that Facebook and all the others do as a daily job. If you notice, none of these companies has a Chief Digital Officer, because they are native, it’s a DNA thing. Whereas all the banks have a Chief Digital Officer. As soon as they can get rid of that role, you’ll be able to say “Oh, they’ve got it now!”