Finstar Financial Group, a global private investment group, has just launched its venture capital arm, called FinstarLabs, dedicated to building the future of financial services. In order to led the new program, founder and chairman Oleg Boyko has appointed Mark Ruddock as CEO.
In conjunction with the announcement, we had the opportunity to interview Mark about the new program, the strategy and approach as well as his vision on entrepreneurship and the tech developments.
FinSMEs: Hi Mark. Can you tell us a bit more about yourself?
Mark: I’ve had a range of experiences over the past few years leading venture backed companies in enterprise software, mobile applications and on-line financial services. I’ve been a founder, and come in as a growth-stage CEO, experiencing the thrilling ride of taking companies from their initial stages to an exit.
Most recently, I had the opportunity to lead Wonga’s international businesses… It was a fascinating experience, working not only on a number of exciting innovations within online financial services, but also having a chance to work with both internal teams and industry regulators from Cape Town to Oslo. It left me with a strong sense of the opportunity for the future of financial services, and in particular the potential to harness nascent technologies to serve those historically underserved by traditional financial institutions.
FinSMEs: Let’s speak about FinstarLabs. What is it?
Mark: A bit of context first…FinstarLabs is the venture capital arm of Finstar Financial Group.
I was drawn to FinstarLabs largely because of Oleg Boyko’s vision for Finstar Financial Group. He, and the senior management team he has put in place, have a clear focus on harnessing emerging technologies to serve the underserved, providing a range of financial products and services that not only deliver great outcomes for customers but also enable compelling returns for the business.
FinstarLabs is focused the future of Financial Services, where a number of unique forces are coming together to create new whitespace and challenge incumbents as never before.
We believe that there are opportunities to blend breakthrough user experiences, nascent technologies and data science to deliver critical improvements across the entire consumer experience, and find exciting new ways to serve those historically underserved by financial institutions globally. On a pragmatic level, we will seek to leverage our unique sectoral and subject matter expertise to deploy those innovations with a view to creating exciting new businesses for the group, as well as delivering improved unit economics and sustainable competitive advantages to our existing businesses. We also aim to generate top quartile returns from our venture investments.
We will take a four pillar approach to this task: invest, acquire, incubate & build.
First, in cases where we have unique insights, we will leverage our world class internal development skills and knowledge to bring them to life. Second, in cases where we have identified exciting young entrepreneurs, or early-stage companies that are already building uniquely positioned and strategically important innovations, we will invest in, incubate and accelerate their companies from our Berlin-based accelerator. Third, in cases where we have identified later stage companies with unique skills or technologies that we consider of strategic importance, we will invest in and participate in nurturing them towards a more successful future. Finally, in cases where we feel it imperative to own a technology or a business outright, we will have the ability to acquire and integrate it within our existing suite of solutions.
Ultimately we believe that our work at Labs will enable the Finstar family of companies to create highly respected mainstream brands whose products excite and deliver lasting value to customers while generating compelling financial returns for the Group.
FinSMEs: What are you looking for exactly?
Mark: A number of things. Breakthrough technologies that can help us deliver exciting new products and services to our customers, and/or provide fundamental improvements to the unit economics of our core businesses. This could be by reducing the cost of acquiring new customers, more effectively identifying customers whom we can safely serve, improving our credit decision-making capabilities, reducing the cost of serving customers, increasing lifetime value, or other areas. We are also looking for companies at the forefront of financial services innovation, who are disrupting traditional financial products and services, or who can enable us to serve those who have historically been hard/impossible to serve. Finally, we are looking for subject matter experts who can help us remain at the forefront of the key pillars of our business.
FinSMEs: What’s your (overall) investment strategy/approach?
Mark: We are a globally focused investor, but we will likely be targeting opportunities within Europe and North America to begin with. We are stage agnostic as a group, but will likely be more focused on early stage ventures within Finstar Labs itself. We will focus on companies in areas of Data Science/Big Data, Credit Risk and Fraud, AdTech/MarTech, and transformational Financial Services Platforms and businesses (FinTech, InsureTech, etc.)
FinSMEs: What do you like to see in company founders you work with?
Mark: I like to see a passion for what they do and a commitment to build high quality teams that can realise a vision. They also need a keen focus on driving best-case outcomes. The founders I look to deal with know that this is how to construct a great business that offers terrific services for customers.
Beyond that, I look for unique expertise in a range of key areas, entrepreneurial dynamism, and a curiosity and desire to learn that is sometimes hard to find. Given how rapidly evolving the fintech space is, this is of paramount importance, because there is no room for the slow-footed, the complacent or the hubristic.
FinSMEs: Which fintech trend do you personally consider as particularly hot and impacting most?
Mark: I am particularly excited by the range of effects possible from emerging advances in Data Science and Artificial Intelligence. These technologies can not only help us better identify and understand whom we can serve, and enable us to serve those that others do not have the willingness or the capability to, but also discover ways to serve them more efficiently. Ultimately, they have the capability to unlock access to financial products and services for the underserved.
I am also very interested in the ways in which the mobile-centric computing is transforming not only whom we can serve (in particular in emerging markets), but the fundamental nature of the products and services we can offer. I think that the insurance sector, and in particular the ability to change the fundamental economics of and delivery models for insurance products in a way that makes them more accessible/compelling, is very interesting.
And finally, I do believe that blockchain will infiltrate a number of core processes in financial services (payments, etc), reducing the cost and complexity of delivering smaller and more granular products and services.