TFTFC - SE1E1 -A Walk Down Memory Lane -A Conversation with the "Daddy of Fintech"-Nektarios Liolios
Nectarios Leolios, he doesn't need any genuine introductions. Anyone who's tuning in to a podcast that talks about FinTech will know who Nectarios is. Nectarios is practically one of the builders of FinTech. You could call him a veteran, you could call him one of the founding fathers but I think he prefers the term daddy these days. And you'll hear that once we start speaking.
Duena:The magic of Nectarios is that whilst he is one of the brightest minds you will ever encounter, he's also a realist, He is also someone who will invest heart and who will invest action and genuine feeling into putting up those around him. This is what made him the most successful of fintech building builders out there. You wish for a long, long while he was the figurehead behind the very first innovation labs ever in the world. I'm sure most of us have heard of ENO Tribe. After ENO Tribe, Nectarios has moved on and built the hundreds of successes that Rainmaking Machine and other enterprise that he was incredibly fundamental to has offered in grand scheme of putting innovation together with startups.
Duena:So where Nectarios has genuinely made tracks, where his influence has been of a size that would fill up a Netflix documentary is where he has recognized technological and human talent in the industry. He has been able to put together corporate and startups in a way that would push their efforts to innovate light years ahead all through these past twenty years. Listen to his stories. You'll hear some of the amusement and you'll hear some of the scars, but you will certainly take away what is it that happens if a big consultancy is asked to not just bring their PowerPoint slides. Come back next week, loads more tea with other FinTech veterans.
Duena:Hello everyone and welcome to, or welcome back to, we haven't get this silent, There's no longer feeder kid. We have today the pink bag. Hi, Look at Willa. The most important figure you can even bring to mind when it comes to the people that have been constructed digital and think
Duena:that nexarios.
Nektarios:Well, of all, that was rubbish because that's so true. I'm not one of the thank you. Thank you for having me. Good to see you.
Duena:It's not true. It wasn't rubbish. It was absolute truth. I genuinely believe, and I wrote that in a book you probably haven't read, called emotional banking. But it had been for you all as well, and those of people like Rob Findlay and those of people like who are individually really building communities in their respective spaces.
Duena:Fintech was not big enough. So I believe what I said. Fundamental. Thank you for being here.
Nektarios:Well, thank you for having me.
Duena:So what is your mentality for that your journey with fintech really started? Like, how did you first help did that or became involved in it?
Nektarios:Oh, that's an easy one. But I think we can frame it slightly differently. So I started doing FinTech when I left my corporate job at Swift and joined InnerTribe. So when you talk about who started what, think InnoTribe was for me, the pod, this slightly revolutionary subversive thing that emerged that showed me a different way of working with people that you like and rate with no hierarchical expectations and all these beautiful things that that we all talk about. But so we started doing FinTech ecosystem work with the inner tribe startup challenge with all the content bits before it was a word.
Nektarios:And when we decided that we want to launch an accelerator as InnerTribe, the idea was that it was going to be called the InnerTribe Accelerator. Because we saw all these amazing companies in the InnerTribe startup competition, which we were calling financial services startups in 2010, 2011, 2012. And we thought maybe a way of working more closely together as an industry would be to have this accelerator thing, which was new, that came from Silicon Valley. And and then we couldn't do it within Swift because of the politics, so everybody left, and I joined Startup Bootcamp to launch the first innovation focused accelerator program for financial services. And at that point, fintech had started becoming a thing.
Nektarios:And I sat down with this young man called Markus, who became our first COO in December 2013 and was telling him about what we're building, and he looks at me and goes, so fintech, technology from Finland. Right? So I can place moment where I realized that it's not a thing yet. So But this was a journey. Innotribe, the Innotribe startup competition is the first global fintech competition.
Nektarios:We had, I don't know, Wise, when they were called TransferWise, as an early stage company in a Toronto showcase, that was 2011. We had Revolut in 2014, when they just raised the series A, I think. So we've done some early, early days stuff. And this is probably why you kind of made that introduction. It was a small community of people.
Nektarios:And I remember in 02/2015, was it '15? There was this magazine called the FinTech. I don't even remember what it was called. The Wall Street Journal spin off type thing. I forgot what it was called.
Nektarios:They did this feature about the 50 FinTech influence, which was the first time I heard the word influencer. Yeah. So this is all history. I did this for five years. I started Woodcamp and Rainmaking in in my business that was corporate innovation for banks.
Nektarios:We went really global all the way from the Bay Area to Melbourne, Australia. So we had 12 programs around the world in all the cities where there was financial service activity. We did some insure tech work. And then I ran away from everything because I was just tired of having the same conversations with bankers at very senior level, where you look them in the eye, you know, they were never going to do the difficult stuff. They were only going to do the things that look good on annual report.
Nektarios:So this was my journey. It was the most exhilarating and exciting six, seven years of my life at that point, but it was also this very heavy disillusion and bitterness. We kind of go, look, mate, we all
Duena:because we were going to produce it on this as we want to leave Fintech if you want to keep your sanity, but we can't do that because to a degree you have written, to a degree I have written, this is at the end of the day tears from the Fintech crypt. So we're just talking about Fintech again. But I think what's really interesting, and for those of us that are listening to this and that had been part of that time, that were obviously, as a value protector, such a swirl of enthusiasm and we were all so say eyed and so convinced that technology is going to change the world that consumers interacted with that money and we would have made this change. And to a degree, I think all of us sitting around with a paper here would have been part of that, right? But what it is, I think the lost internalization for the newer generations is that the effort that has gone into our digitally transforming bank has turned into an amount of burnout for the most of us that were under those pressures at first.
Duena:That's hard to describe but I will leave it there. And that wasn't necessarily, I think realistically, one, of the speed of innovation and technology, specifically because we were building something that had never existed before. The idea that money had to become digital. Were part of a really quite big moment, I would say. And then obviously with it, to do that, we had to also introduce the idea of agile, the idea of doing human centered design, because you couldn't do this money digital thing without doing those things as well.
Duena:So we had to learn everything and care about everything. But have we done it to all of us? It's a good question. And how far have we gotten, do you think?
Nektarios:Wow. So as you were talking, I kept remembering all the little slogans we used when we're trying to educate people about why the banks are so rubbish at doing innovation. And, and amazingly, lot of these things still haven't changed. I think so. So when we did, we did startup bootcamp, we built an accelerator with a specific focus on it being an innovation driven accelerator rather than an adventure driven accelerator.
Nektarios:So bringing banks on the other side who were curious, and on the other side, startups who were looking for access. Right?
Duena:I even actually, I know it's not that brand, actually, because I can probes that I was a mentor for startup.com, and the the meaning there was to find things that did not exist internally in the organization, so absolutely.
Nektarios:And it was trying to understand where the organization is and trying to figure out how we can actually solve for a problem. But the problem was that the banks didn't really have a clear sense of their identity. They thought they were cool by putting in a 100,000,000 towards an innovation budget that nobody knew how to use. And the startups were naive by thinking that just by talking to the head of innovation, they will be able to get in. So the things we will talk about is so I had all these beautiful slides.
Nektarios:One of them was
Duena:It's a little brush.
Nektarios:PCL. No, PLC, PLC. Yeah, PLC. The biggest obstacles for innovation is PLC. People And go, what do you mean by PLC?
Nektarios:Publicly limited companies. I know procurement, legal and compliance. If you don't bring these people on board, nothing will ever happen. Right? There's one.
Nektarios:The other slide that we had was this arrow that said from ROI to R and D. And then you talk to banks and go, guys, you do realize you're an industry that doesn't have the concept of R and D. Any other industry that talks about innovation, experimentation, fate, everything comes with it. You don't build product because you you experiment experiment with with it. It, You you build build product product because because you incrementally do something different that your competitors do.
Nektarios:And you get all these blank faces because people didn't want to acknowledge that this was it, but reality is that. The other thing in all of this is that people also started conflating things, right? There's this talking about innovation, digitization.
Duena:There's change. These things
Nektarios:are very, very different processes that should be owned by different people, culture change, right? And then you kind of sit down with like and and and the irony of this is we we actually I I had a conversation with a building society in the North Of England about a year ago. And they brought in their head of people because this person wanted to take all 5,000 people of the organization through this change process. And I had to go, guys, who are we kidding here? Nobody joins a bank because they like change.
Nektarios:You tell this to people and they go, wow. And you go, are we for, is this really happening? People come to a bank because they want predictability, they want stability. So if you want to take 5,000 people, all the banks into a change process, nothing's going to happen, you need to find the ones who are actually capable of understanding the progress and personalizing and all that, right. So all this big bucket of law was a part of the big first innovation wave in twenty thirteen, fourteen, fifteen.
Nektarios:And then it all died down. And then people realized we tried innovation, didn't work. Let's go back to BAU. And all the budgets started drying out. And guess what?
Nektarios:It's 2024, and I don't see that much change.
Duena:I think that's a very understated understatement rather. I don't see that much change. I think some of them put side by side their mobile apps from today and the day we last think that the first time, would be very surprised if two features were added. But let's leave that as planned. And I'm sure a number of people would be upset to hear that, but realistically, realistically, nothing has fundamentally changed in the experience with one's money, and there are no more money moments and emotional moments than when I started crying about them.
Nektarios:So sorry, a lot of the changes we have are regulation driven, right? Let's start with that. It wasn't the banks that thought, Oh, let's do this. It's going to help our clients. The other one is if you look at some of the banking apps, it's, Oh, okay.
Nektarios:So this is what Monza did five, six, seven, eight years ago. And now you're doing it a nicer version. Fair enough, right? It's also, I mean, sorry, but sort of, it's all getting a bit so boxy, but you push some buttons there. It's also okay to acknowledge that.
Nektarios:I would always prefer talking to a bank. And when we talk about talking to a bank, we were amazingly privileged outside of boot camp because we were some of the first ones, right? We would actually talk to C level, like proper I C
Duena:know that's fitting. We did learn very much along the beginning of So
Nektarios:the ones who said, look, we're never going to be leaders, we're going to sit it out and figure it out, that's fine. The ones that really bugged me were the ones who pretended that they wanted to be at the forefront and then just got everything wrong.
Duena:The Eurovision theatre, right?
Nektarios:Yeah, it's a theatre. It's the not being able to spend 100 ks on an experiment, being but able to put $150,000,000 aside to create a fund to invest strategically. And then you realize that the people who are running the fund, are not VCs, who are people from M and A or strategy, didn't really understand the strategies or the problems that we're looking to solve for the individual business units. So all this was this unhealthy mess, but it was this also disconnect between ambition of some people in the organization and no awareness about the delivery capability. And this delivery capability was for me, that's innovation.
Nektarios:You build the capability to deliver faster, better not having people go from conference to conference and talk knowledgeably about blockchain.
Duena:Or get a pretty green grass.
Nektarios:For a while, tried to get the hashtag beanbags and post its. I had good trends, but it didn't take off. But everybody had some beanbags and post its in their fancy. And for
Duena:the kids listening to this who don't understand how a hashtag trends, things like Valorz and I list from the beginning of Twitter, Nomcode X. And what was happening is when we were having a conversation in the free dex sphere, that was a conversation on a hashtag. So any guy would have, like, a big meeting over the years such as a, I don't know, a thing of faith, you know, private friend, we could make those hashtags trend. People
Nektarios:would talk about it. Yeah.
Duena:There was a lot of enthusiasm, a lot of excitement. What I think I remember of those days of, you're right, we were very privileged, I said this all over again, every time I teach her stuff, say, look, I was lucky, I got into the fintech industry at the time that it was non existent, it was building, so we all built it together, we all were there to see the moves, to see what existed in terms of systems, to see what existed in terms of culture, to see what existed in terms of technology and the access we had to see, to understand both the technology in the belly of a bank and human debt problem that was keeping them from fixing it, it's probably not going to be easily equaled again. Like for instance, my career afterwards, I've ran on almost like an open accelerator platform, which meant I had to put all of these fintech already mature companies that had gotten this investment from start up with CALM together. And I saw the same thing, which is that the distance remained. It didn't really matter how incredibly perfect the technology was or how much we were working to show that technology in the aspect of here's how you make money.
Duena:Because at the end of the day and why I left FinTech is because it all boils down to how much human debt do you have. Will it matter that Natalia stands in the kills? Or will you shake and go, no, absolutely. I don't pretend you never work and keep your bonds. But equally, we know so many vendors that we've met over the years at WLTs, horrible people that are pretending to just make a bonus.
Duena:We actually don't know enough people who made these hundreds of millions of bonuses. I don't know if you've met them, have you?
Nektarios:So I'm gonna answer the question slightly differently. What you're describing for me is ultimately the root of why things didn't work out the way we idealistically were hoping it to happen, which is that the root of all of it is ultimately not around it not being the right mechanisms or the right people or the right tools or whatever. Right? It's shareholder expectations and the incentivization of senior people. This is really the reason we are where we are for me.
Nektarios:It's if you look at the banks who are really, really bad at doing even the simplest things way back, the moment the quarterly returns were positive, nobody bets an eyelid because you could also tick that box in the annual report. It's like, hey, we've got a lab, innovations tick. The thing about the people, particularly for me is that people would, we met a lot of good people along the way, solid people with all the right intentions, but it was usually a step in their career. Right? And then they moved on and then somebody else and then you go, do I need to talk again to the new head of innovation at this bank?
Nektarios:Maybe not. And because they all also didn't want to do the things that the predecessors did, they had to throw everything out of the window. And in our case, sometimes terminate contracts or not wanting to see a project through, where we were like, are you for real? Because this is actually going to ship product in nine months. It's happened.
Nektarios:This conversation happened. Right? I think maybe, we've got a bit of time. Me, one of the the best moments to explain the mindset that we faced as an innovation execution agency was quite early on in the days of blockchain. We were approached by three big banks, it was like a global triangulation, like a Swiss bank, an American bank, and a European bank, and a UBank.
Nektarios:And it all came from smart people in the room, who wanted to find somebody to help them syndicate chain engagement model. So they said, look, we come together with the problem cases, you bring the startups, but you facilitate the process. And we built a really solid model. It was a tender, so we made it to the final two. And and then I get a call from our sponsor at one of the banks, like our friend who brought us in, saying, guys, you didn't win.
Nektarios:You didn't make it. One of the big consultants has made it, and they made it because the company is more comfortable with the brand they recognize, but everybody in the room agreed that your proposition was better. Right? And then he tells me that he sat down the guys who won and told them, guys, you didn't get this gig because you were the best. You got this gig because you're just already embedded in the organization.
Nektarios:But what I don't want from you is PowerPoints. And the guy from the consultancy, which is a big name, looks at him and goes, oh, okay. We can also do slides. We can also do Prezi. Oh, oops.
Nektarios:That was a response. We're going to give you a deck in a different format.
Duena:Incredible, not at our point, they have Prezis.
Nektarios:Yeah, so this is what we were up against in the early days. And the shocking thing is that these organizations, of course, need to justify their existence and figure out how they continue to be relevant with change, but they've found a more glorified way of continuing doing the same thing. So it's also an unhealthy ecosystem that everybody plays with everybody, because veering off from that is just too risky. And hell, it's people's money on the line. You go, aviation pharma do a lot of R and D.
Duena:Do they do
Nektarios:it? There's people's lives on the line. But there is this mindset that we're special, we're different, you don't get us. Why should we bother changing some things fundamentally where everything just works in the end?
Duena:Discontinuation as businesses use war when it comes to financial services is I've realized when I left the industry, don't know if I left the industry, but when I opened my eyes to there being pharma, to there being retail, to there being aviation, it became very clear to me very fast that there's massive differences and the care towards your humans, the care towards your R and D, the care towards your ideas is completely absent in banking. It feels like a discipline where that doesn't exist as compared to other industries. With that said, it reminded me something of what you said of those early days of innovation when we were knocking these doors down and talking to these execs and saying, look, you can, you have to be this dude that asks for a new SAP schedule. What was his name? Michael Harte.
Duena:You need to be one of these big people. You have to make the big news. And let's face it, I used to call it, and we can say this on this book, I used to call it boards holding. Like that's what you need to do as a startup or as an innovation partner. You need to go, no, you know the right thing.
Duena:Okay? You'll be fine. And if people kind of ended up being together in a situation that was creating the right digital environment, then that's the success stories. I think something you said there is incredibly true. Every sale we've made from any guy, and I say this openly, has been the hopes to abort or to abet.
Duena:It has been to one or two advocates and corporate heroes that were an entrepreneur at the right time, saw the light wanting to make a genuine change in people's lives and execute it. And like I said, that's step in their career. They're elsewhere now. Most of them are unfortunately very poor talent if you really track them now. But what we did deliver together is that you're right.
Duena:I think that's what the disappointment is to a degree to me and to others. I I heard it is. We thought if we just made the right things, the good, right things, the people would love and we just sit down and create things together, that will undoubtedly be a good day and it would be universally accepted as the thing to do. And what we are struggling with still is the things we have advocated for, the ease of information, organizations that are generally disinterested, not to silent, people who don't have all of these things. We've been saying this, like Antonio said, for a solid 15 inches at the MiniComp.
Duena:And the changes are very incremental. So what areas have remained where there is big change to still be made?
Nektarios:So maybe a reflection of what you just said is my conclusion out of this was to run away and hide my head in the sand for a while, and then come back and try and do the things that banks will never do. But no longer trying to get the industry to change. It was very much like, look, if you're part of a community that doesn't get the financial services that you need, because the banks were never built for you, let's build the bank for that. That's why we built Daylight, the first LGBT bank in the world. That's the startup I'm working on now.
Nektarios:It's also recognizing the banks were never built for the people who want the service. So in terms of areas, yes, I think if you take a step back and just look at markets, let's start with a statement that we used at the beginning of of my new startup, which is called Radish. We would open our pitch by saying that the existing financial services system is built by straight white men for straight white men. And that in itself gives you a whole market of people that are probably getting no deal from a bank or a lesser deal from a bank. I build our businesses a lending business.
Nektarios:If you look at what lending products are available out there, they're all available for people on the surface can afford them. So again, what happens with all the other people who are actually maybe creditworthy, but the banks don't see them, or who have specific reasons why they can't afford a loan where with the right lens and right understanding of the vulnerabilities, you can actually lend to them and knowing that you will get a return. So there's a lot of I wouldn't go into into a vertical and say, hey, we need to fix lending, or we need to fix, I don't know, capital markets, corporate actions, whatever. I would go and say that there's just still so many people who self declare that the system doesn't give them what they actually need. Let's start there.
Nektarios:And also, mentioned earlier something about the technology and the excitement. I've always felt that what we're doing was technology enabled business model innovation, right? So the key thing was still, let's look whatever is the latest tool because it's going to be transient, it's going to be ephemeral, but let's change something in the way we service the people and the model behind it, etcetera. And we're getting a little bit there. I think some of these things started happening.
Nektarios:I I think the fact that nowadays people because it all started with payments, right, payments innovation now is a little bit of a it's a commodity. Nobody thinks about it anymore. Right? Which is beautiful. Let's now start looking at the media things.
Nektarios:And I grew up in the capital markets world. So for me, in my financial services journey, when I was wearing a suit and a tie, was very much with corporate actions, security settlement reconciliation, margin calls, proxy voting, it was all super fascinating, but also very much driven by this cartel mindset that we know what we're doing, don't get involved. And even if it's not efficient, we've got an agreement amongst ourselves. And technology can change a lot of that. But it hasn't really started doing that.
Nektarios:So stock exchanges, the depositories and everybody else in that space still have a lot of scope to change things. But then yeah, if I just look at the tiny little pocket of what we're doing in lending, taking the vulnerability of the individual and the purpose of the loan into consideration makes for a very different story when you're looking at underwriting someone.
Duena:You're something like creating money moments, which was this concept I was doing back in my FinTech day, which are essentially meeting people when they genuinely have a need. A need that comes accompanied with a sentiment, whether it comes accompanied with an emotion, that comes a compliment with trust and ideally enough relationship building if nothing can meet them there. So yes, it's still there, which is shocking to me that we still haven't really solved all those. But with that said, like you say a lot, Tessmil, if we've not only if we look at the world today versus the world a few years ago, while it's closing and it's slow and it's horrible in some ways, in terms of technology, we've done our job to a degree. I was saying this for another podcast.
Duena:If you stop to think about it, we've all worked to create this digital thing. There's going to be another five, ten years of tying up loose ends. And then all we're going to be left with is, how much humanity can we do? Because all the other automated bits are made by machines now. So I think we are coming into a time where all of the organizations we've talked to will have to wake up, will have to say, this is it.
Duena:Now I have to do what all the others have done and look at my people and look at the relationship with the humans that I'm giving money to and genuinely make changes. And the story you told earlier reminded me of something from years and years ago, I'll tell it to you really quickly. We made the first product in my startup first that was called, I don't even, Ding Teams. What it did was essentially allowing you and allowing your people to use AI to end their self representation, to end up being part of a perfect team, doing the perfect job together. Right?
Duena:So in essence, software around you to combine people perfectly in your organization. We brought this to CEO of a bank, and he was absolutely in love. She was shocked. She was like, this is how we should have all worked. We should all go home, only come back and do things that we are all Sure.
Duena:Surprised. Why haven't and and a day later, he called and he said, dear, board said there would be tanks on the ground if I even present this to anyone else because they did insane to think that we could change our organization. So that's where that was life. And I strongly believe that we have never worked. We are so incarcerated in vain made by some idea of what process is and in capable of really moving away from it, that fear, this comes from the lack of psychological safety of talking about what the issue is, then we might not get into big changes.
Duena:So maybe big changes are not needed. Maybe we were thinking that it doesn't need to be the innovative bit.
Nektarios:First of all, it doesn't. It's the sense of self importance that the industry has. But I think also we're talking here now about something that happened over the last, let's be generous, fourteen, fifteen years. And if you look at where we've got in that period compared to how things evolved before that, it's still quite astonishing. I think it's an industry that actually is very slow moving, but has this attitude that things have to happen fast.
Nektarios:That was the beginning. It's like, you know, where the digital banks started coming up. If you're going, but where are Monzo? They've already been three years in and they still haven't had the millions of clients. And you go, three years takes you to get a project approval in the bank, so shut up and wait.
Nektarios:Right? And now we've seen Revolut and Monza and Starling and all the other nice banks doing good work and figuring out their respective profiles and creating creating choice for the consumer, which I think is amazing. Anyway, this can go this can go on for hours.
Duena:And we have stay jobs here before, so you'll be pleased to hear it won't. So why don't we leave it at this, Nectarios? A lot changed. When we were part of those first days, there will be more days of growing. I think I believe, and I don't know if you agree or not, that there's a lot of hope that people can take out of where we go to, but there's also a lot of work that needs to be done and probably needs to be done by the next generation.
Duena:Need to be out faster.
Nektarios:Look, my take on this is, I've spent fourteen years in this world, maybe a little bit less. I've learned a lot, I think we did something. And a lot of it was around community and grassroots. I don't care much about the corporate side of this industry. That's why I'm doing my own thing.
Nektarios:But I think that's also maybe the way forward. So more and more people will actually create meaningful startups, not to work with industry, but actually complementary or supplementary to what the industry is just not interested in figuring out. They will continue having their role as an agents of trust then, but everything else is no longer in the long term, the banks will just be this safe where you store things. But beyond that, not much around services and products. That's for us.
Duena:I love that as an outro, and I love that as a hopeful message for everyone else. No more banks, we don't
Duena:need them other than the bit that Nectarios has quoted there.
Duena:And thank you so much for everyone tuning in. We do have some bitter pieces that are juicier, but we're going to keep those for the next episode if we can think of them. Thank you so much for coming over and thanks and telling us about your journey and what it's been like. I know people are learning from this and hopefully we can keep them informed. Thanks and talk to you soon.
Nektarios:Take care.