Stefan Krautkrämer and Dirk Rudolf founded the infrastructure startup Fintecsystems (FTS) in 2014. The Fintech companies aims to advance banks and financial service providers in digital processes. The founding team has particular expertise in this area. Together, the two founders had already helped establish 'Sofortüberweisung' and turned it into a leading online payment method in Europe. After the sale of 'Sofort' to Klarna for more than 100 million euros and the departure of the two founding team members at the end of 2014, they wanted to establish a new company. As experts in the financial sector, they saw great potential in the new Payment Services Directive (PSD2), which would regulate and liberalize the payment market.
Dirk Rudolf, Fintecsystems co-founder, explains:
"This regulation promised interesting business models around account information and payment initiation. We wanted to build on that."
How a personal experience led to the idea
And this is precisely where the startup is now active, with over 60 employees at four locations. Fintecsystems, for example, offers online transfers in online shops. Another example in the area of account information and analysis is the online loan application. Wherever creditworthiness needs to be checked digitally and in real time, the solutions from the Munich-based company play a key role. Fintechs a crucial role. How did the two founders come up with the idea? As is often the case, it is based on personal experience, explains Dirk Rudolf:
"Stefan had a bad credit score due to the many test accounts he opened as COO of Sofort, which prevented him from getting a Deutsche Bahn credit card. In my case, it was worse terms on a mortgage, which I probably got because of an older zero-percent loan."
As a result, both had an impeccable score, even though they were solvent. Rudolf continues:
"Then we came up with the idea that there was no better way to determine current creditworthiness than the salary account. That made it clear: We offer a real-time credit check for banks and financial service providers."
A game changer for the industry
Because unlike data from credit agencies, account information is always up-to-date. From this initial business case, the founders developed a series of additional products. While there are several providers on the market, FTS boasts several unique selling points, such as: Stefan Krautkrämer, Fintecsystems co-founder:
"With our API, we can reach 99.5 percent of banks, or around 6,000 in total. Our categorization software, which clusters account information, is the most powerful analytics software on the market, with an accuracy of up to 98.5 percent in the most relevant categories. Today, we are the leading 'Open Banking' and analytics provider."
Fintecsystems works for more than 160 companies, including banks such as Santander, DKB, and N26, as well as all national comparison platforms such as Check24. DKB, one of Germany's largest direct banks, is implementing fully automated online lending. According to the founders, this is an absolute game changer.
The challenges on the road to success
However, the fintech also encountered challenges on its path to success. There was the challenge of launching a product that would allow them to evaluate their own ideas and visions of what they wanted to present on the market, the founders explain. And when you're a young company with banks as customers who need support in digitizing processes, you don't have the easiest target group. Decisions here often take a very long time – due solely to regulatory constraints, but also due to lengthy coordination rounds between departments. As a result, the startup struggled with very long sales cycles, especially in the beginning, until a final conclusion was reached. Another challenge was putting together the right team, as Rudolf explains:
"That takes years! And then, ideally, this team needs to stay together for a long time. It's basically like a football team: It takes a lot of patience to form a championship contender."
But the startup had the staying power. And so, even after the year of the coronavirus crisis, Fintecsystems is looking forward to strong business performance. Dirk Rudolf comments:
"We can be very satisfied with this challenging year, which was so unexpected and difficult to plan. We had a brief COVID-19 dip in the spring, but overall we are benefiting from the very high demand for online services during the COVID-19 phase."
Fintecsystems sees increasing demand and doubles revenue
Whether in e-commerce, where Fintech offers payment services, or in financial services such as the aforementioned online loans and credit checks, demand is increasing everywhere.
“This means that we grew beyond our targets and were able to generate almost six million euros in sales last year – double the turnover compared to 2019. This is a great result for us as a growth company with more than 60 employees,”
says Krautkrämer.
Despite all its successes, the startup still sees itself as a hidden champion. This is partly due to its B2B focus, which allows it to fly under the radar. However, it's precisely in the B2B environment that highly successful and sustainable business models can be developed, as Krautkrämer and Rudolf have already demonstrated several times. Fintecsystems is currently working on a financing round to further drive growth.
