Nigel Thacker, CCO at Silverflow: “The need for disruption in the fintech and payments sector is as urgent today as it was 20 years ago”

While fintech has radically changed some aspects of banking since the turn of the millennium, there is still much room for disruption. That message comes through loud and clear from Nigel Thacker, Chief Commercial Officer (CCO) at Silverflow, in this interview. And Nigel is a man well worth listening to, having lived his professional life in the world of online payments for over 20 years.

“The legacy infrastructure players have not moved on,” he explains. “The edge that fintechs have is the agility to out-innovate the big boys and this has allowed companies, such as ourselves [Silverflow] to make waves.”

In this wide-ranging interview, we cover a lot of topics. But as a taster, here’s what Nigel had to say about the potential impact of AI on fintech. “AI-powered algorithms excel at processing vast amounts of data with unparalleled speed and accuracy. This capability could empower brands to extract even more valuable insights from complex datasets…”

And if you’re looking for some inspiration, ask yourself if you should follow Uber’s example. “Uber is a massive brand but could be stripped down to a database with scheduling and payment services,” said Nigel. “And you can extrapolate that example across many other companies to better appreciate the impact and potential of fintech”

Huge thanks to Nigel for taking the time to answer our questions so thoroughly – and we hope that you find his hard-won insights valuable too.

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Could you please introduce yourself to our audience and share how you ended up working in fintech?

As CCO of Silverflow, I’m responsible for the sales and go-to-market strategy, heading the commercial team across the world as Silverflow changes the world with its payments innovation.

However, my educational background is actually in Electronics and Telecommunications which is what I studied through college and started my career in. But from the year 2000, some 24 years ago now, I moved into payments and fintech, as the second UK employee for Bibit, a Dutch fintech startup which was effectively Adyen Gen 1, helping them become the best-of-breed European/International PSP, bought by RBS in 2005 for €100 million.

I’ve also worked at some other industry heavyweights holding senior positions at the most talked about brands – Worldpay, Vocalink, Adyen. I’ve worked across all aspects of the payment acceptance side of the industry, International gateway/acquiring, BIN sponsorship, transactional FX, launching new payment methods and, more recently, managed the enterprise sales team at Adyen.

What do you think traditional finance and banking companies can learn from disruptors in the fintech space?

First and foremost it is to always have the mindset to disrupt the system where change is a fundamental requirement to keep pace with market needs. Our Co-Founder and CBDO, Robert Kraal, has proved this philosophy throughout his career too. He saw that banks were behemoths, too stifled by bureaucracy to innovate quickly always asking the question why can’t we find a quicker way.

Fast forward to today and we’re clearly on to something. At Silverflow, we see the need for disruption in the fintech and payments sector is as urgent today as it was 20 years ago. Only a handful of newer entrants are delivering innovation. The legacy infrastructure players have not moved on. The edge that fintechs have is the agility to out-innovate the big boys and this has allowed companies, such as ourselves to make waves.

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In what ways is artificial intelligence impacting the fintech sector?

Artificial Intelligence, or AI, has been a hot topic for the last 12 months. It has the power to be a real game changer but it is also something we’re continuing to monitor closely.

One of our USPs is our transparency with our customers on data. We believe that many businesses now have an unexplored opening to boost transaction quality, prevent fraud, and enhance consumer experience through data-driven payments. AI could take this to the next stage as it is not just about crunching numbers but would help to unleash the power of data like never before.

AI-powered algorithms excel at processing vast amounts of data with unparalleled speed and accuracy. This capability could empower brands to extract even more valuable insights from complex datasets, facilitating smarter decisions across the board, from assessing risks to detecting fraud and fine-tuning investment strategies.

Before e-commerce, there was no data. The internet delivers a huge amount of useful data on transaction processing and now we see the card schemes also delivering significant data points from their side. To connect the two and “mine and combine” the data, a technology shift is required. Mainframe card processing platforms were never designed and in many cases are not capable of handling this additional data.

What are some of the biggest regulatory challenges affecting the fintech sector?

Regulation is one of the biggest challenges facing fintechs. This is because they often operate in highly regulated industries, such as banking and finance, they are subject to strict compliance requirements and must obtain regulatory approval before launching their products and services. Failure to comply with regulatory requirements can result in costly fines and legal challenges, as well as damage to reputations.

It is important for companies to know the regulations for each country in which they operate as each country has its own regulations when it comes to payments and finances based on their individual know-your-customer (KYC) and anti-money laundering (AML) standards. They’re set by the government and aim to provide a strict regulatory framework.

However, the landscape can also be further complicated as some countries lack payment security protocols or a regulatory framework. For example, if businesses are operating in the EU, they will need to be compliant with PSD2 – a legislative framework that secures safe payment exchanges but under stricter regulations.

As of 2020, customers in the EU are required to complete a two-factor verification at checkout as part of Strong Customer Authentication (SCA). This adds not only an extra layer of protection but also causes friction in the customer journey.

I believe partnerships and collaboration are the keys to remaining compliant.

At Silverflow, we have very clearly defined what we consider to be within our scope and where we seek partners to provide specialised services.

Let’s take something like fraud and risk management, for example. Our core proposition is not centred around fraud or risk management as there are already highly specialised companies in that domain. We’ve developed a straightforward approach to seamlessly collaborate with external parties. Our preference is to select partners who align well with us in terms of innovation, speed, culture, functionality and more.

We strongly believe in focusing on our core strengths, recognising the vast potential for improvement, and consequently, we welcome collaboration with partners who specialise in complementary aspects of the chain. Our product focuses on delivering a solution to a problem which for the majority of players in the payments space has not been fixed, such as card transaction processing platforms.

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Which geographical hubs around the world are leading the charge when it comes to fintech innovation?

There are many established and emerging fintech hubs around the globe from the US to EMEA and APAC. We’re headquartered in Amsterdam with offices around the globe including in the UK and US I believe that London has fast become one of the largest hubs for fintech investment.

It was only two years ago that the city overtook San Francisco and New York as the world’s biggest centre for fintech investment, attracting nearly £8 billion and according to the London Stock Exchange, a total of 2,500 fintechs are active across the UK – the majority in London – making the city one of the biggest in terms of fintech organisations operating in the region.

However, we know other areas of the globe are exploding which is why during our last investment round, our strategy was to continue expanding in the regions that we’ve gained a strong foothold in (Europe, North America, APAC).

How has the role of the finance department changed with the advent of fintech?

Fintech is at the core of many major companies today – that is the paradigm shift – not just in finance. For example, Uber is a massive brand but could be stripped down to a database with scheduling and payment services. And you can extrapolate that example across many other companies to better appreciate the impact and potential of fintech.

There is a definite trend for global “fintech/gig/tech savvy” brands focussing on the payments part of their operation within which they have gained significant knowledge and expertise over the last five to ten years, to bring the payments journey in-house in order to gain control over the data exchange and utilisation.

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How does your company differ from its direct competitors in the fintech space?

Silverflow is throwing off the shackles of cost and inefficiency inherited from legacy systems. Our platform enables the best payment experience for everyone. To do this we are taking an innovative approach, harnessing new, cloud-based technology rooted in clear and fundamental. Cloud is the key differentiator. The cloud allows you to develop your software quicker, meaning we don’t have to reinvent the wheel all the time.

Our founders were disillusioned by fragmented, slow, patched and even broken legacy systems, so we’re making the changes that the payments ecosystem desperately needs. Think of the cars you’ve owned in your life. Your first one may have got you from A to B and, as it was your first, will always hold a special place in your heart. Its flaws may even have been endearing. But today, a Tesla does the same job, only cleaner, faster and is actively making the world a better place… and it’s doing it with style!

Silverflow has created the Tesla of payments technology. A radical and groundbreaking alternative to the incumbents, entrenched and established legacy systems of the payments industry. It’s a new kind of payment platform, improving payments today with a better tomorrow built in.

What are your top three fintech predictions for the upcoming years?

From a Silverflow perspective, we anticipate a heightened focus on data transparency, transaction speed, delivery of accurate settlement data (specifically scheme fees), fraud reduction, and ease of use this year in the upcoming period.

We expect an increase in the number of new acquirer applications to the card schemes as PSP’s/Gateways who have become regulated see the benefits of moving up the food chain

We also expect to see a limited number of global merchants, those who have built up payment expertise within their businesses over a number of years. They now have a good understanding of how they could utilise the data they could have access to if it was delivered to them transparently. Not necessarily wanting to become a principal member of the card schemes but looking for a “direct connection” to the networks.

What are some of the biggest challenges the fintech sector is experiencing as a whole?

Investment or a lack of has been high on the news agenda. Having secured a €15 million investment led by industry veterans and payments experts at Global Paytech Ventures. Piccus Capital, Coatue, Crane Venture Partners, Inkef and several angel investors last year, we can say with confidence that there is an investment if you have the right product or offer. 

The payments industry has seen its fair share of disruptors in the past decade or so with players like Adyen, Stripe, Paypal and more making huge technological improvements to the front end, providing easy-to-use and innovative solutions for merchants to leverage the latest payment options on the market.

But little has been done to improve the backend payment processing, which has been running on technology that is nearly 40 years old. This was our opportunity and I believe that if businesses want to grow, scale and secure investment, then they need to hone in on the opportunity they have, then find the right investor and consider what they bring to the table.

What advice do you have for aspiring professionals wanting to work in fintech?

Simply put, I’d say get involved. It is a hugely exciting space that is steeped in opportunity to innovate and disrupt!