Ed Maslaveckas, chief executive officer of Bud, explains how its recent technology “breakthroughs” have put it in a position to enter other markets, including the US, and reveals its latest product development.
1. Bud entered the US earlier this year – why did you decide to launch in this market at the point you did?
It’s always very attractive launching in America and I know a lot of fintechs look to that as a potential option. For us, actually, the decision was fairly simple in the end and it was always about timing. We service banks, we service fintechs and lenders and, quite honestly, there are a huge amount of banks and lenders over here [in America].
It’s obviously a different market from an Open Banking perspective, but a lot of the work we’ve done in the UK is around helping banks use the data they already have, to make either better lending decisions or a personalised customer experience.
We made the decision last year that it’s probably a good time. Could we build our models on US data? We proved that we could do that – and accurately. That was really when we started building out the strategy and hiring the team, end of last year. We’ve got a team of six at the moment – three in sales across the large Tier One banks, regional banks and then fintechs. We built the product last year, we have the team and I’m spending a lot of time here.
We’re growing very well in the UK and it’s still our home market, but we thought it was time to start building for the future. It’s not a one-year job, it’s maybe not even a two-year job to start doing well over here [in the US]. We’ve closed a couple of customers over here already, although we haven’t announced them yet, so things are going well.
It’s certainly a hard market and the reason why I’m personally here a lot. In the UK we’re not the biggest fintech, but most people in our space know who we are and that helps the conversations. Whereas in the US, you’re no-one, it is [like going] back to 2017, pitching – and that’s absolutely fine but it’s a unique challenge.
2. The Consumer Financial Protection Bureau, or CFPB, is consulting on introducing rulemaking to Open Banking in the US – is that something the industry is cognisant of?
The industry over here – whether you’re talking about pure tech or you’re talking about fintech or banks – have been very aware of what’s been happening in Europe, and really the rest of the world, like South America, Canada. It’s a challenge here, with 6,000 bank charters and a different ecosystem.
As we’re starting to see in the UK, the benefit [of regulation] to both bank and customer is clear, so I feel like it’s a no-brainer. But equally, something that we know about the US market is – I’ll be very frank about it – they haven’t done a fantastic job of opening up data aggregation. Yodlee did a good job, and I think Plaid did, in terms of making it really accessible for all sorts of innovative solutions to come about and most of the great innovations in the fintech market over here have been somewhat driven by that access to data.
In lots of ways the US is very mature in leveraging transactional data. However, it’s very clear that is not the best way to do it, via screen scraping. It’s very clear that data is being shared, so it feels like the regulator needs to do something. They obviously have a big challenge in the market, but they also have the benefit of seeing what we’ve done in the UK and seeing what’s happened in other places – Brazil, is another example.
3. What is the latest on your partnership with TransUnion, following their strategic investment this year in Bud?
At Bud, we’ve put out a number of exciting announcements in a row after a few years of being a little quiet. From a high level, where’s that come from?
Well, back in 2019, we made this seemingly odd or crazy decision that we were going to try and be number one in the data intelligence space on that transaction data, rather than go for this pan-European payments connectivity race that everyone was on. Obviously, 2020 and 2021 brought billion-dollar-plus valuations to the great and the good of European aggregators. So, for a while, we felt a bit worried about the decision.
But since then, we’ve been able to make a few breakthroughs and I think our technology is quite a way ahead of the market at the moment. What that means is the products that we can build in the credit risk space [and] in the fraud space are quite considerably better than what exists in the market. That isn’t to say it’s because we’re somehow better people, it’s just that it’s a matter of focus.
It’s also unlocked our ability to come to the US. We can go to new regions and countries quite rapidly now, given how we’ve built our technology and you will probably continue to see some new countries being opened up as well.
TransUnion, as a go-to-market partner – you’re always slightly sceptical when you’re a fintech working with an established business – [but] the team have blown us away and [are] driving us to a lot of customers.
4. What is your take on the slump in fintech valuations, Silicon Valley Bank’s collapse and rescue, and the ‘banking crisis’ – what’s the bigger picture?
It is a harder environment, for sure, with a lot of companies trying to fundraise very hard. There are valuations being pushed. It’s a little bit about making sure you’re not overstaffed, you are prepared for what I think is a two-year correction cycle and if you can come out of that strong, and even maybe take the valuation hit, you continue for two years to keep growing, then you’ll do okay.
I don’t think the industry is necessarily in crisis. We’ve certainly heard that a lot of banks and fintechs want to understand what their portfolio risk was in terms of changing interest rates, how that’s impacting customers in real time; how the change in some of the expenses and the inflation is also impacting, so it’s a double squeeze.
We’ve been developing a portfolio assessment product, ‘Portfolio Management’. So, beyond the ability to assess an individual, we’re giving banks the ability to assess all their customers in real time on their bank accounts. That’s how we’ve reacted to some of that instability. That’s our latest greatest product and it is still somewhat in beta. We’re moving in a slightly different direction to the market – we’re at the point where we’ve built a quasi-banking CRM type tool.
Where there is a problem, there is always an Open Banking solution.
Bud is a partner of Open Banking Expo UK, which this year is a two-day event, taking place 18-19 October 2023 in London – register your interest here.