The art of a fintech partnership: Don’t spoil each other
The art of a fintech partnership: Don’t spoil each other

This article is sponsored by EUROCARD and published in Copenhagen Fintech 2018 magazine. The magazine is available here.

Eurocard recently partnered with fintech startup Cardlay and ­launched a new app for managing corporate expenses. Combining a startup mentality with financial compliance requires a special partnership structure, the Nordic Business Manager at Eurocard says.

Sometimes it’s best not to mess things up by mixing young startups and seasoned financial institutions.

When Eurocard partnered with Cardlay in January, the company purposefully chose not to acquire the fintech startup and interfere with the development team.

Patricia Scott

“Eurocard’s vision is to accelerate speed to market for services, and because of that we believe that Cardlay would be stronger, faster and much agiler as a partner, not being acquired and an integrated part of a large corporate financial institution,” says Patricia Scott, Nordic Business Manager at Eurocard.

The art, she says, is about getting new products and features quickly out to customers while staying compliant. And that is best accomplished if each partner has the freedom to work in their own way.

“This is the best way to benefit from each other. We need their agility and developer spirit, while they need our huge customer base and our experience with financial compliance and mainframe systems,” she adds.

When two worlds meet, challenges arise

The first project for Eurocard and Cardlay is a new app that automates expense management in real-time integration with the transactions for companies, whose employees use Eurocard.

Building the app has been a practice in balancing agility with compliance, Scott explains.
On one hand, they want to add new features as quickly as possible. On the other, financial regulation makes it challenging to move with the preferred pace of startups.

As an example, Cardlay initially ran their service on Amazon’s public cloud platform. But since the Financial Services Authority and Eurocard audit require a predefined format and process that Amazon does not fully comply with, they had to host the system on a mainframe-based in Sweden instead. Adjusting formats and processes with Amazon would have delayed launch significantly, Scott estimates.

“It is extremely important for us to stay compliant, so we chose the safest and fastest solution,” she says.

The actual development of the app is entirely in Cardlay’s hands. Eurocard provides API’s for efficient data exchange but doesn’t mix the engineering teams. Cardlay, as a result, is able to ship new features extremely fast according to Scott.

“They developed a major feature in two weeks, which we would never have been able to accomplish. It’s part of their culture to work at a whole other pace than most other financial institutions,” she says.

One step towards fully automated expense management

So far, the special arrangement between Eurocard and Cardlay has borne fruit. In May, Eurocard and Cardlay launched ”Eurocard Pro” to the public — an app that integrates the Eurocard transactions with expense management in real-time.

Gone are the days when employees have to spend hours manually logging receipts from business trips while the financial department struggle to keep up with expense management. Now, employees instantly get the transaction on their phone after a purchase and spend a few seconds taking a photo of the receipt and fill in the required information. The rest is handled automatically.

For most companies, automating this process can free up a lot of time. The average company spends 24 minutes handling a typical expense claim according to a study from KTH Royal Institute of Technology in Stockholm. By comparison, the companies that have automated most of the processes do it in just 8 minutes.

“It’s about digitizing the expense management processes for the customers, so they become more effective. Ultimately, our goal is to digitize the whole expense flow from receipt to accountant and tax authority,” Scott concludes.

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