Most fintech companies begin with a singular mission: to disrupt the market and provide cutting-edge solutions to lingering problems in the finance industry. But what happens after the initial launch? When's the best time for technology investment?
At Interpolitan Money, those two questions play a crucial role in forward planning. With an expanding global presence and regulatory licenses in numerous regions, the company must stay on top of tech to improve user experience and international compliance.
Recently, we spoke to Interpolitan's Head of Compliance, Jack Miles, to find out why investment in technology is so vital for alternative banking providers.
Leveraging Technology for Efficiency and Compliance
Many of Interpolitan's clients are non-resident high-net-worth individuals with complex international arrangements. Often, they have trouble accessing traditional banking in the UK because of residency and minimum balance requirements.
Until recently, non-residents unwilling to change their financial strategies found that discrete accounts with built-in relationship management were largely unavailable.
"Some banks do provide international accounts for non-residents," explains Jack, "but these accounts often come with many restrictions and still require maintaining substantial balances to be reasonably functional."
Non-resident business owners also found themselves out in the cold for similar reasons.
"Banks, understandably, tend to be risk averse, mostly because enhanced due diligence is expensive, and they simply can't justify assigning resources to support continual risk assessment," explains Jack. "So under normal circumstances, they're unlikely to do business with individuals and entities that require it unless the payoff is substantial due to the additional costs incurred."
Recognising non-resident high-net-worth individuals and businesses with complex structures as underserved financial consumers, Interpolitan set out to change the status quo.
Instead of rejecting potential clients with more involved due diligence needs, the firm developed a blend of technology and human resources dedicated to solving the problem.
"Technology plays a vital part in processing international anti-money laundering and counter-terrorist financing checks," says Jack. "Understanding our clients' needs and requirements is important. Using the tech available to us, we've been able to reduce internal processing times and reinvest the time we've saved in directly engaging with our clients."
Boosting Value with Technology Investment
"As an FCA-regulated business, we assess our products and services regularly to ensure they provide fair value," says Jack. "Our clients expect a personal service with minimal downtime, so we need to provide that."
Jack and his team have found ways to streamline processes and stay ahead of industry peers by regularly auditing the company's tech stack and investing in new technology when appropriate. He's quick to point out the additional value of technology as a morale-boosting device.
"Increasing headcount doesn't always lead to improved outcomes, especially if people begin to feel like pencil-pushers," he says. "By automating mundane tasks, you give team members the freedom to concentrate on higher-value activities that drive growth and innovation while ensuring you still have key day-to-day processes covered."
Creating Better Partnerships with Innovation
Investing in technology not only enhances the customer experience but also makes Interpolitan a more attractive partner. Many firms grow by building relationships with other fintechs that offer complementary services. By leveraging innovative tech solutions, Interpolitan has enhanced its appeal to potential partners, creating opportunities for collaboration and mutual growth.
Another exciting avenue is the potential of generative AI in finance. A hot topic in the industry, AI could revolutionise various aspects of financial services, from personalised customer interactions to sophisticated fraud detection. By embracing these technologies, alternative banking providers can stay at the forefront of industry advancements.
"Technology isn't a singular problem-solver," explains Jack, "but again, by automating tasks that previously required manual input or using AI to streamline processes, team members get back valuable time, which they can use to build meaningful connections."
Jack believes generative AI can help teams innovate and find new solutions, improving rather than eroding job satisfaction. When employees are involved in genuinely creative work, their roles become more exciting and interesting, increasing their sense of purpose and fulfilment.
Sustainable Growth with a Steady Focus
For a growing company like Interpolitan Money, tech investments are crucial for maintaining compliance with regulations in various regions. This adherence to regulatory standards is reassuring for clients and essential for sustainable growth, especially during rapid expansion.
Insights from McKinsey highlight the importance of sustainable growth in the fintech sector. Funding options have changed since the market correction in 2022, making it more challenging to secure investments.
The regulatory landscape has also continued to evolve. In the UK, the introduction of Operational Resilience and Consumer Duty by the FCA has forced firms to review and reconsider both their tech and their approach to customers. Additionally, Authorised Push Payment Fraud Reimbursement rules have come into force since October 2024.
This means it has become harder for new applicants to enter the banking and payments market and increasingly expensive for existing businesses to continue operating as usual.
For this reason, fintech and alternative banking companies now need to prioritise slower, steadier growth with a focus on self-sustaining practices. Sustainable growth strategies that optimise operations and enhance compliance are vital for long-term success.
"Until the recent market correction, many companies found it relatively easy to access funding for innovation," explains Jack. "Now, although funding is still available, it's harder to obtain, and money has to be spent complying with existing and emerging regulations, forcing fintechs to focus on sustainable growth and self-sustaining practices."
According to Jack, one sustainable growth option is a steady yet measured investment in finance-focused technologies with a proven track record. In other words, companies should pursue innovation thoughtfully and strategically to ensure long-term success and stability. By doing this, alternative banking providers can stay profitable and thrive in an evolving financial landscape.
Moving into a Brighter Future
Intelligent technology investments have driven steady growth at Interpolitan, earning the company a spot on the prestigious FEBE Growth 100 list for the second year in a row. Looking ahead, the company plans to use innovative tech solutions to enhance compliance as it expands into new regions, further improving the client experience.
To learn more or open an account, visit the Interpolitan website today.
