Collaborating on Disruption: How Susanne Chishti is Connecting Investors to FinTech Startups
Susanne Chishti is the Founder and CEO of FINTECH Circle, Chairman of FINTECH Circle Innovate, and Co-Editor of The FINTECH Book.
By Carolyn Lawrence with Hailey Eisen
The financial services sector is facing a wave of disruption. Thanks to an onslaught of FinTech companies—combining finance with technology—changes are being made in the way people bank, borrow, invest, and spend money.
When you talk about FinTech in the UK, it’s Susanne Chishti who first comes to mind. Founder and CEO of FINTECH Circle, Chishti is a former financial services executive, entrepreneur, and investor with a passion for innovation. She spent more than 14 years in the banking and finance industry in roles with Deutsche Bank, Lloyds Banking Group, Morgan Stanley, and Accenture in London and Hong Kong.
“Disruptive” FinTech, she explains, is made up of a combination of entrepreneurial ventures looking to replace the services offered by established banks by developing new business models to change the way things are typically done. Plus, with more ‘traditional’ FinTech, financial services technologies are being sold to banks to help improve efficiencies, cut costs, and/or enhance the business model.
The industry is thriving, especially in London, thanks to the city’s enormous financial services ecosystem, and the UK government’s support in the form of infrastructure and adaptive regulatory environment.
With the growing number of FinTech companies in London, Chishti recognized an opportunity to start FINTECH Circle—an angel network that works with the most innovative and disruptive brands in financial technology and connects them with senior thought leaders and financiers. As Europe’s first angel network focused specifically on this industry, FINTECH Circle is already making waves. All investors within the network have strong financial and technology backgrounds, giving them the opportunity to provide not only funding but also invaluable support and guidance. The focus is seed and early stage investments, for funding rounds ranging from £100,000 to £500,000.
The network is looking for innovators providing solutions across retail banking, corporate and investment banking, asset management, transaction banking, private wealth management, insurance, finance regulation, cryptocurrencies and blockchain technology. While FINTECH Circle is currently based out of London, Chishti has plans for global expansion.
I sat down with Susanne while in London for Women of Influence’s debut Senior Executive Dinner, to find out more about the woman who is trying to disrupt the order of things in the financial services sector.
CL: How did the idea for FINTECH Circle come about?
SC: Twenty years ago I worked for a technology company in Silicon Valley. After that I moved back to Vienna and then to London where I worked in finance and banking. I began to hear colleagues talk about “FinTech”—which was emerging at the time in London. They wanted to know more about it. Who were these entrepreneurs, and what were they doing? Many in the banking industry wanted to get involved—either as investors or by sharing expertise or offering mentorship. At the same time, I had come across many FinTech companies who were saying the opposite: they wanted smart money—people who could invest in them but also contribute expertise and context. So this was how the idea was born.
CL: Can you explain the “circle” part of the name?
SC: Traditionally in financial markets it has been all about competition, you want to be better than your competitors. But in this sector, it’s very much about collaboration and cooperation and being open to working with your competitors. Within the circle you’ve got investors, entrepreneurs, banks, and innovators—all working together to support a new way of doing things.
CL: Can you give me an example of how this collaboration works?
SC: In the UK you’ve got Santander Bank, a leading European financial institution, and you’ve got Funding Circle, a peer-to-peer lender. Peer-to-peer lending is a new concept of FinTech, which essentially aims to cut banks out as the middleman allowing individuals to lend money to other individuals or small medium sized companies with lower interest rates and better returns. The original idea of the peer-to-peer lending model was to be really disruptive, but what Funding Circle said was, let’s work with the banks. Santander gets many loan proposals that they must reject and they send these leads over to Funding Circle, which in turn sends potential customers to Santander to set up banking services, which Funding Circle can’t provide. So you create a collaborative environment where you exchange leads that are of enormous value to the other side, but no value to you. That’s the meaning of these collaborative business models, working together and trying to find win-win situations, and that’s a strength of women as well.
CL: I was thinking exactly that, it plays very well to women’s inherent strengths. Besides your long and established career in banking, what gave you the inspiration to be at the centre of this circle, putting all the leaders together?
SC: I think it’s a personality thing, to be honest. I have always been someone who has brought people together; I like to build up communities, start groups, and share. I don’t think that information should be power that you have to hold back—I think you should share it because then it becomes much more powerful. Also, because I started out in technology and spent 20 years in banking, I could appreciate both sides and felt the excitement bubbling up in London around FinTech. The timing was right for me to get involved and begin connecting all of the experienced stakeholders and trying to create something of value.
CL: This is big. Where do you see it in its lifecycle?
SC: I would say probably year two of a 15 to 20 year cycle…it’s just the beginning!
CL: What are you doing to connect the individuals within the circle, the investors and the entrepreneurs?
SC: One thing we’re focused on right now is education. We’re organizing educational events where we invite bankers, entrepreneurs, and investors to learn about FinTech and what’s happening within the sector. For example, in June we organized a Blockchain event, which is an important technology enabling cryptocurrencies. This could be one of the most disruptive technologies in financial services but it’s such a complicated subject that very few people understand. That’s why we invited everyone to join, to learn, and to network as well—which is another thing we do to help the community grow.
CL: When it comes to pairing investors with start-ups, how does the pitch process work?
SC: We launched officially in November last year and we had our first two rounds of applications and investment in January and March. The FinTech companies apply with a one-page document, a ten-page pitch deck, and a three-minute video (we want to get a sense of how the entrepreneur comes across and explains the company in their own words). Upon review, we choose the top ten companies that will participate in our Selection Days.
The ten companies present to a panel of six or seven experts across various areas of financial technology, and six are chosen to proceed. Those top six companies are invited back for a coaching day where we spend an hour with each, offering guidance and tips on how to organize their final presentation. This is often very important because many don’t have expertise in presenting their idea convincingly. Normally during an angel network pitch you’ve got seven minutes to get your message across to a room of investors. In Europe specifically, in the UK, the role of understatement is a virtue that everyone admires, but if you’ve only got seven minutes you can’t do understatement—you have to showcase all of your achievements. We help entrepreneurs determine what to highlight and how not to be humble about their achievements.
Finally, they get to present to our angel network of 50-plus investors we’ve got here in the UK. Of the 12 companies that presented in our first two rounds, four have been funded, which is one-third of the companies—a very good ratio that we’re very happy with. We have also been shortlisted by the UK Business Angels Association as the “Best Syndicate of the Year.” AlgoDynamix, a FinTech firm our angels invested in was shortlisted as the “Best Early Stage Investment in Disruptive Tech,” and Fourex, another company we invested in, went on to win Richard Branson’s competition, Pitch to Rich. We are very proud of both of them!
CL: I want to ask you about the woman behind the idea. Tell me about the environment you were raised in. Who were your female role models, how were your parents involved in nurturing your success?
SC: I was raised in a small Austrian town of about 11,000 people. My mother was a wonderful role model in the sense that she loved us unconditionally, but she was a housewife and she never had the opportunity to fulfill her dreams. I remember she would cut out newspaper articles with pictures of senior female executives, women in suits with business suitcases in front of airplanes, because, she would say, “if you want to become a manager you should do it. You should go for your dreams.” I remember I had these pictures of businesswomen up on a pin board in my bedroom and I thought…why not?
CL: You have two daughters. Are you passing the same beliefs on to them?
SC: I’m not cutting out articles but I’m always encouraging them. I’m 100% a believer in girl power and that as women we need to achieve our dreams and do what we like to do.
CL: What opportunities are available to women in the FinTech sector?
SC: When you think about FinTech, you could argue that finance and technology are both male dominated industries. But, if women feel there is a glass ceiling in banking then now is the right time to leave the banking industry and start your own FinTech company. As an entrepreneur you can achieve your dreams. This should, and hopefully will be, an opportunity for women. It plays to our strengths because it’s about innovation and collaboration, about breaking down barriers, and about questioning the status quo. The way things have been done doesn’t have to be the way we do things going forward.
CL: I like it. Blazing a trail for women in a new industry. What about your own balance?
SC: I approach it as if FinTech is my third baby—but of course, my first two babies (now 9 and 10) come first. I have always been an active parent and always want to have time for my children. That means I’m often working after they’ve gone to bed, working until midnight when I know they’re asleep upstairs.
CL: How do you find the energy for such a demanding career and being an active parent? How do you fill yourself up?
SC: I get lots of energy from talking to people. I enjoy meeting new people. It gives me great joy. I think it’s a combination of having fun in work, making time for my friends and family, and yoga on the weekend. That and holidays twice a year where I get to recharge my batteries, including skiing in Austria. My goal is to just make daily and weekly life fun so it doesn’t get boring.
CL: Finally, what’s your vision for FINTECH Circle? What is your hope for change in the industry?
SC: My vision for FINTECH Circle is that we become a global company. Currently we’re based in London and have a global community online of more than 5,000 people, but all of our events are UK-based. I would like us to start organizing events across Europe, Canada, the US, and Asia. I would like to find partners and local FinTech experts in those markets that we could work with to create a global network that’s physically based as well as virtual. We are also launching FINTECH Circle Tours, because many people would like to experience the FinTech ecosystem in London, learn from it and tap into the UK’s investor and customer base. Participating companies will spend two days touring across the FinTech scene in London and learn everything it would typically take nine months to learn. Our goal is to collaborate with other cities globally because we want FinTech centres in many countries. The FinTech industry is global and over the next 20 years, FinTech will replace banking, I think.
CL: You think FinTech will replace banking? That’s a big statement.
SC: Yes I do. In 20 years it will only be FinTech. I think we are looking at a major shift in our society and in the industry, across all sectors: retail and corporate banking, investment banking, asset management, and transaction banking. FinTech Banks will replace traditional banking.