During the 10th edition of the Luxembourg Finance Innovation Summit, Finologee was named Finance Startup of the Year. We met with Raoul Mulheims (CEO) and Jonathan Prince (CSO) to discuss the creation of the Luxembourgish startup, the impact of the PSD2 regulation, and much more.

Which market challenges lead to the creation of Finologee?

Building on years of experience as technology providers for banks and financial services through long-standing businesses like Mpulse and Digicash, we decided to focus on a particular segment in the FinTech arena: RegTech, where technology meets regulation. The experience gained in our previous endeavours with banks on one side and with businesses and invoice issuers on the other made us discover several needs and ‘pain points’, for which we believe we can provide valuable answers and remedies. Here is what we do:

facilitate digital on-boarding of end-users by aggregating the best international FinTech products

• help banks holding payment accounts to achieve full PSD2 compliance

create a digital marketplace and a leading-edge technical environment where FinTech companies and traditional financial industry players give access to their services and expose their APIs

enable customers to identify, fill-in and sign their SDD mandates using their computer or mobile phone

• and finally, develop a system for creating multichannel messaging strategies, e.g. for the optimization of billing procedures, user authentication or digital marketing.

We also take advantage of a strong team of entrepreneurs: Finologee’s founders Raoul Mulheims (CEO), Georges Berscheid (CTO), Jonathan Prince (CSO) and Didier Spick (CFO) have been working together for many years. We were ready to write the next chapter of our story by establishing Finologee less than 30 days after the successful hand-over of Digicash to Payconiq in August 2017, while remaining the prime technical partner for Luxembourg’s mobile payment ecosystem and continuing to operate Mpulse, the SMS routing and payments provider, in parallel.


How is the PSD2 regulation transforming the banking sector?

The revised Payment Services Directive (PSD2) has the power to trigger substantial changes in retail banking as we know it today. In a few words, PSD2 enables bank customers, both consumers and businesses, to use third-party providers to access their bank account history and to trigger payments on their behalf. Banks are required to provide these players access to their customers’ accounts through open APIs. This enables third-parties to build financial services on top of banks’ data and infrastructure. Banks will no longer be competing (only) against banks, but against many other players leveraging this kind of access and the data underneath.  

The new payment services directive takes shots at many things that banks have held for granted in the last several decades over the reliance of their customer base and their legacy issues, which makes it very difficult for some of them to deal with fast-evolving business and technology environments. Consumers have long been demanding more from their retail banks, but financial institutions have not always been able to meet their expectations. The pace at which changes occur will grow exponentially, driven by PSD2 and digitisation, leading to democratisation of access to the consumers’ payment accounts.

Two new types of players will enter the retail financial services arena: Account Information Service Providers (AISP) and Payment Initiation Service Providers (PISP).

• AISPs are the ones who take the data of customers banking habits like how much they spend, when they spend money and where they spend it and turn that data into a profitable material.

• PISPs are the ones who will initiate payments such as bill payments or P2P services on behalf of the financial institution’s customer.

New players taking advantage of these access types will have lower costs than traditional banks and be more agile when it comes to bringing new services and use cases to the market. Banks will see increased costs with their tech teams and systems as well as in compliance and security personnel and infrastructure.  The end result will likely be that costs are passed on down the line to account holders, as banks are not allowed to charge the new entrants for account access services. Unfortunately for the banks that also comes at a time when consumers have started to shop around for their financial services and have a tendency not rely anymore on a single bank covering all their needs. The competition will be hotter than ever.

All that being said, there will also be unique opportunities for the traditional banks to either start or continue their very own service and product innovation strategies or to pair with fintech companies and take advantage of the strengths that these start-ups have.


What are, according to you, the benefits of your product/service for the financial market players?

We build digital products and ecosystems. Over the last 25 years, Finologee’s founders have launched and co-founded the most successful digital community in Luxembourg of the ‘90s (“Luxusbuerg” with 70’000 users), a leading digital web agency (Nvision) in 2000, the national SMS routing and payments platform (Mpulse) in 2006 and the Luxembourg’s banks mobile payment platform (Digicash) in 2012. 

Finologee is our latest venture, aiming at bringing fundamental change to how financial products are assembled, distributed and consumed. We provide the building blocks for these new digital products, make them compliant with financial industry regulation and establish the API platform and a marketplace where supply meets demand. Our value proposition consists in creating the right technology environment, the financial setup and billing features, together with variable business models and the appropriate regulatory structure.

We have designed and developed a high-performance infrastructure to host, aggregate, market, operate and expose our own and our partners’ FinTech products and components, with a powerful API gateway, an adequate billing and revenue share management system, a product assembly and aggregation engine, all based on a hybrid cloud infrastructure. The goal of this system, named FinTech Acceleration Platform, is to create a digital marketplace and a leading-edge technical environment where FinTech companies and traditional financial industry players give access to their services and expose their APIs for other users to integrate them to build and enhance their own products.

On top of serving as a marketplace and enabling platform for institutional players, businesses and start-ups, the FinTech Acceleration Platform powers the assembly and operations of several industry and context- specific products built by Finologee itself: a full digital onboarding platform, KYC Lifecycle management powering customer remediation operations, payments with SEPA direct debit authorisations, our ‘PSD2 for Banks’ product and finally a compliant multi-channel messaging infrastructure.

Flexibility is key in this context: our customers and partners not only use our products via API access to embed the features, components and data in their own environments, but also as custom-made or off-the-shelf products with user interfaces and business management processes we have designed for them. 

Our clients typically consider the benefit of relying on a single regulated partner to get both access to top-of-the-range international FinTech building blocks and custom implementations serving their needs as one of the critical factors when deciding to work with us. Access and customisation of FinTech and RegTech products and processes becomes substantially faster and easier to manage compared to financial institutions and regulated players dealing with these (mostly non-regulated) providers and sourcing their products directly.

To further speed up the implementation process and strengthen our value proposition, we also leverage our partnerships with well-known market players such as Clearstream, KPMG, Société Générale and the German FinTech figo.


What are the next steps for Finologee?

At this point in time we are in the process of being granted a ‘Support PFS’ license by the Luxembourg Minister of Finance which we consider a major milestone in the corporate evolution of Finologee. Being able to operate under a Professional of the Financial Sector license will indeed be a turning point for the company as we will be then in the position to deploy our digital onboarding system with a first customer.

Our second product ready for a go-live is our ‘PSD2 for Banks’ environment. To date, 23 players chose to work with us to comply with the PSD2 requirements. Our goal is to be able to meet both our clients’ expectations and the legal deadlines set in March, June and September 2019 with all our partners.

In addition to our ‘PSD2 for Banks’ and digital onboarding products, we will continue to work on other products, such as our KYC lifecycle management system, digital SEPA direct debit authorisations, multi-channel messaging and many other custom-made solutions tailored to our clients’ needs.

Besides setting up products that address specific needs and “pain points”, we will also speed up the development of our FinTech Acceleration Platform. The goal is to deploy the dozens of financial services building blocks, which we are currently using to build our own products, in the framework of a large-scale API portal, making them available to innovators and established players alike.

Finologee definitely is on a growth path. We have a team of 17 now, and we have several open positions: feel free to apply on our web site www.finologee.com should you be interested to join us in this journey.

We strongly believe in the power of the strategy we chose: a unique setting in Luxembourg to trigger and nurture digital product innovation for the financial industry, with the goal to play a substantial role in the European FinTech landscape over the next years. We aim at contributing substantially to the construction of Luxembourg’s FinTech/RegTech story, as we have done in the past with Mpulse and Digicash, by leveraging the Luxembourg financial centre’s expertise, and then expand our reach quickly into other European and international markets.

Publié le 15 janvier 2019