In the past, embedding banking services into business products has proved to be a difficult task; especially for smaller businesses. However, times now appear to be changing as more options become available, easing the process.
One such firm providing better options is Swan, an emerging European Banking-as-a-Service (BaaS) and embedded finance leader.
In this week’s Behind the Idea, we hear from Nicolas Benady, CEO of Swan, about the company’s journey, its ethos and what the future could hold for embedded banking.
Tell us more about your company and its offering
Swan is Europe’s emerging leader in embedded banking. Our easy BaaS platform enables any company to embed banking services like accounts, cards and payments, into their product. It’s the easiest way for a company to elevate their product while building additional revenue streams into its business.
Swan has a lot of momentum in Europe. We already serve over 100 clients across 16 diverse verticals and 11 countries, from proptech to fintech, and now we’re focused on expanding our product and our European presence.
Any kind of business should be able to offer banking products in a seamless way, whether a retailer or an HR company. This could look like offering insurance at the point of checkout with an online retailer or receiving your company-branded expense card in a matter of days.
But until now, this sort of innovation – providing banking services – was reserved for fintechs and neobanks. The tide is turning, and now companies of all kinds are beginning to tap into this highly lucrative revenue stream. That’s what Swan is about.
What problem was your company set up to solve?
Embedding banking services used to be a long and expensive journey. I know because many years ago, my co-founder Nicolas Saison and I tried to work with BaaS. We wanted to issue cards, but it was such a pain at the time that we gave up entirely.
Over the years, we kept an eye on the development of the embedded banking sector and eventually decided: let’s build it ourselves. We were both experienced in fintech; we knew what we wanted to do and how to do it. The idea was to build it Software-as-a-Service style so that anyone could visit our website and start building within five minutes. So, a developer with a cool fintech idea at 2 am could jump in our sandbox and buy themselves a croissant the next morning with a self-issued card (thank you Apple Pay and Google Pay – this takes a bit longer if you’re waiting for a plastic card to be delivered).
We achieved this by making everything public-facing and easy to access. But that’s not the only way Swan makes it surprisingly easy. Crucially, we shoulder the heavy regulatory responsibilities, freeing companies from the intricate complexities of banking operations and associated risks. This empowers them to move faster and lets them focus on their business.
We spent lots of time with regulators to build up this offering, with simplicity at its heart. Since our customers have no need (or desire) to understand compliance, fraud or speak to payments operators, we are happy to take it on. We take on all the risk so they can focus on what they do best: building the best UX for their customers.
Since launch, how has your company evolved?
We’ve gone from being a handful of developers, to a full-fledged scaleup with offices in Paris, Bordeaux, Berlin, Barcelona and (soon) Amsterdam and Milan!
Our offices are an important strategic step in our path to becoming a leader in Europe. A key area in which we’ve evolved is hyperlocalisation: we moved from offering accounts only in our home country, to building and tailoring services based on regional preferences. Take a German company for instance: with Swan, they can provide banking in German terms, with local payment options and even IBANs prefixed with “DE”. Beyond ensuring a better user experience, this strategy enables businesses to create new revenue streams. Offering the best localised experience means having local teams talking to local regulators, and providing local support.
Now in terms of numbers, we’re quite happy. We’ve now processed over €7billion and have a monthly transaction volume of around €500million. The number of transactions within our markets have skyrocketed and we attribute this jump in transaction volumes to dramatic increases in our customer base over the past 3 years, especially in France, Germany and Spain. We recently celebrated our 100th partner. A clear milestone for us.
What has been the biggest challenge or most ‘tricky moment’ to overcome?
I believe our biggest challenge is ahead of us. We are scaling steadily, and this is only going to continue. After a certain level of growth, especially between Series B and C, leadership inevitably encounters all kinds of challenges whether that be business, product or cultural.
We make a point to stay humble in our leadership team as we take on each new phase of the company, and of course, we look to those who have already done it and learn from what worked and what didn’t. Success doesn’t come only from intuition. We must pay attention to changes and feedback, whether within the industry, the market or within Swan itself.
What are your biggest achievements or ‘proudest moment’ so far?
An anecdote comes to mind. I was explaining Swan to a friend while out to dinner. He wasn’t well aware of our industry and fintech, generally.
“Sorry Nico, but I’m not sure people will use what you build,” he said.
And then he took out a Pennylane card to pay for dinner. Pennylane was one of Swan’s first customers and their cards are enabled by our platform. That was definitely a proud moment.
How would you describe the culture of your company?
People join Swan because they’re excited to join a company that’s aiming to become the industry leader in Europe. We attract individuals who want to mark their career with something big. With this in mind, it’s in our DNA to constantly seek to do better, because that’s the only way to truly grow. So of course, when we’re recruiting we’re always looking for signs of a zero-ego personality.
Something that comes out a lot in our internal surveys is the humanity of the team. We try hard to hire people with the same mentality. I really despise the guru mentality that was especially popular in the tech scene some years ago. This is something we’ll never cultivate at Swan. So everyone at Swan is free to speak out, whether intern or C-suite – and friendly debates are something you’ll commonly see.
Lastly, and perhaps most importantly, our culture is based on quality. Swanees do whatever it takes to smoothen out wrinkles, especially if our customers are being impacted. We are do-ers: agile and willing to shift our approach to make it more efficient – myself included.
What’s in store for the future?
Embedded banking is no longer a trend, it’s become the norm. Entrepreneurs know it’s the best way to enhance their UX while simultaneously building new revenue streams. So they’re looking for the easiest way to achieve their goals.
That’s what Swan taps into. We’re focusing on expansion into new markets, so we can serve more European companies who are looking to enhance their product and move it into the future. We already have strong operations in France, Germany and Spain, but we aim to build a presence in the Netherlands as a next step. Our end goal is to become Europe’s go-to BaaS platform, helping to establish Europe as an embedded finance superpower ahead of the American and Asian markets.
When it comes to the product side of things, we’ll be adding additional payment collection capabilities and embedded lending in the coming months. These services are high in demand with our existing customers.