European banking is a field that keeps on evolving, with its complexities and prospects in all matters. One individual stands at the forefront of innovation, poised to revolutionise the way consumers navigate financial markets.
Meet Alexander Gromov, the visionary founder and CEO of PickTheBank, a fintech platform pioneering seamless access to banking products across the European Union.
With over 15 years of experience in pivotal roles within the banking sector, Mr Gromov witnessed firsthand the evolving demands and complexities facing both institutions and customers. Fueled by a desire to bridge the gap between fragmented markets and consumer needs, he embarked on a journey to create PickTheBank, driven by a commitment to transparency, efficiency, and customer empowerment.
In this exclusive interview with The Future, Mr Gromov unveils the inspiration behind PickTheBank, discusses the challenges of EU banking fragmentation, and shares insights into the company’s strategic initiatives and future trajectory.
How all started
What inspired you personally to create PickTheBank, and what specific gaps or challenges did you observe in the EU banking market that motivated you to start this venture?
I have been working in banks for the past 15 years, holding CFO and Head of treasury positions. In my last position, I handled the bank’s liquidity management, financial model, and customer base optimization. The aim was to increase a stable customer base while paying reasonable interest rates.
I suddenly realized that the market was becoming more and more competitive: following the inflation outbreak banks started raising their interest rates and competing for customer funds.
Demand for fixed deposits and other savings solutions hiked as well: the amount of household deposits opened monthly in Eurozone banks hiked from 22 bn EUR to 160 bn EUR a month.
I struggled to find a sufficient amount of information about the savings market structure.
When I left the bank at the end of 2022, I started collecting information about interest rates offered by various banks all across the EU and eventually launched our banking products comparison engine. Now our database contains information about conditions offered by 1000+ banks in 25 European countries.
What specific challenges PickTheBank is aiming to address in the EU banking market?
The main thing I’d like to highlight about the European banking market is that it’s still fragmented. Although we live in a single European Economic Area where banks have the freedom to provide financial services all across the EU, the majority of the markets are still dominated by local banks. Their conditions differ significantly from one country to another.
E.g. some Italian banks offer fixed deposits at rates up to 5% while Cyprus and Greek banks don’t only offer deposits at rates well below 3%. On the other side of the table mortgage in Cyprus is still available at a rate below 5% while in the Baltics some banks charge a 10%+ rate.
Thus, the next big thing after making the market transparent should be making it really seamless and efficient.
To do so language barriers between banks and customers should be bridged: customers should be able to communicate with banks from all across Europe in their own language; banks should be able to offer their banking products on the markets where they’re needed without huge market entry costs.
With this in mind, PickTheBank is entering the market with its second product: the one we call a multibanking platform application.
It should simplify customer access to multiple banks under one roof: we onboard customers once and then reuse the KYC profile for different banks. We bring customers a unique tool to open and manage savings accounts (and other banking products) in banks from different countries in a single place. On the bank side, we help banks bridge the language barrier and find more customers they would be unable to access and service directly.
In what ways has PickTheBank evolved and improved its service since its inception in 2022?
PickTheBank started as a statistical database and a marketplace using an advertising business model. We redirected customers to partner banks and were remunerated when clients opened banking products. This business model works well but can’t provide a unique experience for clients: it doesn’t help manage bank accounts under one roof and doesn’t help to overcome the language barriers that I mentioned above.
Now we’re entering the market with a platform solution that will be taking care of the whole product lifecycle.
Lots of demand in Cyprus
Cyprus is known for its strategic location and favourable business environment. Could you explain why you chose Cyprus to find PickTheBank and how this decision has influenced the company’s growth and operations?
We’ve chosen Cyprus for several reasons: easy company registration and maintenance, reasonable taxation and a law system are some of them.
It’s also a pleasure to work in a rapidly growing and empowering business environment.
I would also highlight the vivid and high-quality IT market of the country which makes hiring easier and helps rapidly address questions thanks to big IT, legal and financial communities.
Can you discuss any specific initiatives or collaborations PickTheBank has undertaken in Cyprus to leverage local expertise or networks in the banking and finance sector?
Cyprus’s banking and financial market has a great potential for further development. Although the Cyprus domestic market is quite small, we can see several financial institutions building their global products and solutions from Cyprus using Cyprus as a head office or a place to host particular business functions. Cyprus banks focusing on the domestic market are developing as well.
From a personal perspective, what do you find most rewarding about leading a fintech company like PickTheBank in Cyprus, and what challenges have you encountered along the way?
First of all, we’re building a global company aiming to help individuals from all across Europe. We see lots of demand for our services in Cyprus in other European countries. The local demand helps us prove the product-market feet, validate our ideas and development plans, feel the necessity of our services, and support our clients and partners.
The complexity of interest rates
How does PickTheBank streamline the process of investment selection for EU residents amidst the complexities of various banks and various banking products?
Three main factors are helping us guide our clients through the complexities of the savings market. First of all is transparency. We help our clients compare banking products and make informed choices.
Second, in PickTheBank we realised that most of the banks have slightly different (but generally the same) onboarding requirements for their customers. Customers have to fill out virtually the same questionnaires and pass through nearly the same onboarding process in every bank. These processes can differ in some complicated cases (e.g. for business customers, or high-net-worth individuals).
But for typical retail customers, they are virtually the same. The key feature of the multibanking platform solution we’re now launching is a reusable KYC profile. Once the client fills out the questionnaire and passes identification once – there is no need to start from scratch with another bank. It helps to streamline the onboarding process significantly.
Third, we enable access to multiple bank products in a single application. Thus, you don’t have to register in multiple bank apps separately, memorize logins and passcodes, amounts you hold in one or another bank account. Now everything can be accessible in a single application helping to save conveniently and efficiently.
What measures does PickTheBank take to stay ahead of frequent changes in interest rates and evolving market dynamics to consistently offer the best conditions to its users?
That’s a great question. Our users can benefit from the monthly market reviews we provide to our subscribers. We put a lot of effort into updating our database. We constantly work with banks to bring new banks with competitive conditions to our app. Hope that soon our clients will be able to benefit from the best interest rates offered by banks from all Europe: from Portugal to Baltics and from Malta to Sweden.
A legal matter
How does PickTheBank ensure compliance with regulatory standards and data protection laws while aggregating and disseminating sensitive financial information?
That’s a great question. PickTheBank operates with customer data in a highly regulated environment and is committed to the highest data protection laws. Although PickTheBank is not a credit institution, some similar bank-level security measures were applied.
It required both legal and IT teams to ensure our solutions comply with the legislation and the implementation of compliance and data protection measures into our IT systems.
We established internal controls and procedures to ensure compliance with AML regulations. We implemented measures to ensure the security and confidentiality of customer data, including encryption, access controls, regular audits, and vendor assessments. Data collection, usage, retention, and disposal are also covered by internal procedures. We implemented encryption and secure authentication methods to ensure that only authorised individuals can access the data.
What strategies does PickTheBank employ to foster trust and credibility among its user base, particularly in a sector where financial security and reliability are paramount?
In my opinion trust and credibility are built on three main pillars. First of all (it may sound obvious), understanding the needs of our clients and being on their side is the main thing that helps us gain clients’ trust.
We are building our solutions following the demand of our clients for greater transparency, convenience, and accessibility in banking services. We receive lots of feedback from our customers and it motivates for continuous improvement of our solutions.
Second, transparency and compliance. As I mentioned before, we’re committed to the highest standards of compliance. Our internal standards are even more strict than the laws require them to be. It helps us offer secure and professional solutions and gain credibility from our clients and partners.
Third, our professionalism and commitment to building solutions meet the highest expectations. Sometimes it’s something that couldn’t be seen but felt by clients at the fingertips creating trust and credibility for the company.
The long term
Looking ahead, what are PickTheBank’s plans and initiatives to further enhance its services and expand its reach within the EU banking market?
Talking about plans for 2024: we’ll be offering our clients embedded wallets to help them manage their savings more smoothly. A selection of investment products is scheduled to be available on the PickTheBank platform in Q4 2024 – Q1 2025.
On a long-term horizon PickTheBank is building a multibanking application covering all individual customers’ banking needs under one roof.
Imagine a single application where you can access services offered by multiple banks: a choice of savings products with the highest interest rates, a choice of investment options with various terms and risk profiles, and a choice of loans offered by multiple banks.
You’ll be able to save at the highest possible rate offered by one bank and borrow at the lowest possible offered by another. All in one place. That’s the product no single bank can beat.
