Tink is building the foundation of every bank in the world: Fintech interview part 20

Swedish fintech Tink arrived on the scene back in 2012, with what was at the time a business model that went direct to consumers, but it has now found its place in the business to business sector selling services to finance firms.

Fredrik Hedberg, co-founded Tink with Daniel Kjellén.

He is now CTO with Kjellén CEO

Hedberg said both were entrepreneurs that had set up tech companies and had also spent some time working in the banking sector.

This combination was key to the creation of Tink. “We realised that the entire financial services industry was going to change as it had been left behind,” said Hedberg. “There was an opportunity to improve customer experiences and leverage all the data.”

He said there was so much value in the information in the finance sector that was never used.

It all began in 2012 with a personal finance app, its first product, which was launched in Sweden. It was an example of the use of open banking even before banks were forced to by law, due to the PSD2 regulation in the EU and the UK’s Open Banking rules.

This was PSD2 way before PSD2 existed. The app could be downloaded and connected to any bank. “We could collect a person’s complete financial profile through a single app,” said Hedberg. To do this Tink reverse engineered the APIs that the banks already had for their apps

The app was built on in the years that followed to enable a customer to use link to it as a banking platform  without it actually being a bank platform. You can pay your bills, top up your account and manage your money. This product went to about 500,000 customers by 2016, all of which were in Sweden.

But fintech was changing fast and the thinking at Tink was changing. “At this time we started to realise that our product need not be limited to challenger banks but was going to be the foundation of every bank in  the world,” said Hedberg.

He said a significant number of banks approached Tink wanting to form partnerships.

This according to Hedberg is how Tink “slid into the business to business sector.”

“The banks wanted a fast way to get the capabilities to connect to any bank in Europe that we had, and the ability to move money around regardless of which account or bank it was in. They also wanted to give data driven financial advice,” said Hedberg.

He said banks want to build their own products so were looking for a service to help them do so.  The Tink platform allowed them to build their own on top of its platform. Such was the success of this business Tink became 100% focused on B2B in 2017.

Today it boasts a range of tier one banks as customers. These include BNP Paribas Belgium, ABN Amro, as well as well as fintechs ranging from large companies like Klarna to startups that are “two guys in a garage,” said Hedberg. There are also thousands of developers building products on the Tink platform

The platform has two sides. It provides connectivity to thousands of banks across Europe on one side and enables developers to develop pan European financial services products with an API  on the other.

The shift in business model from a consumer facing app to a platform for finance firms led to rapid growth. Before the company moved into B2B it had about 30 staff. Today it has 150 people, which grew from 50 a year earlier. It expects to double the number of staff this year.

As a tech company about 75% of staff are in R&D. “We are building Amazon Web Services for financial services companies,” said Hedberg.

Outside Sweden it now has an office in London and plans another four across major European cities. The UK is a new market for Tink which it is aiming to build significantly,  according to Hedberg..

Read the previous fintech interviews

Part 19 Goldex,  Part 18 Azimo, Part 17 Yoyo, Part 16 Bud, Part 15 Previse, Part 14 Finastra, Part 13 InstaReM, Part 12 Eucaps, Part 11 AimBrain, Part 10 Meniga, Part 9 TrueLayer, Part 8 InvestCloud, Part 7 ClauseMatch, Part 6 Rebuilding Society, Part 5 Honcho, Part 4 Akoni, Part 3 Wrisk, Part 2 CreditLadder, Part 1 Taina Technology