Interview with Simon Docherty and Maëlle Debeugny from Frollo

Never say we’re afraid of change at TechFinitive: in this, the thirteenth of our Breakthrough interviews with fintech leaders, we gain wisdom from two people rather than our usual one. A warm welcome, then, to Simon Docherty and Maëlle Debeugny from Frollo!

Frollo has been helping Australian banks, lenders, brokers and financial advisers to embrace Open Data for four years. That’s when Simon Docherty joined them, bringing the benefit of two decades working in the payments sector.

Three years ago, Maëlle was working in EY’s Financial Services team, helping companies embrace new technology. Then she was lured to Frollo as Product Lead for Data, and it’s clear that she loves the job.

In fact, what blazes through from this joint interview is that both are clearly delighted to be working in this impactful sector and for Frollo in particular. And that, for them, AI is no buzzword: it’s something they’re putting to use every day. To find out exactly how read on.

Hi, I’m Simon Docherty, Chief Customer Officer at Frollo. I began my career journey in FMCG, then briefly ventured into telco before diving into the payments sector, where I’ve been for over two decades. I’d worked in and been drawn to startups, which led me to found my own company, initially focused on payments, which later transitioned into event ticketing. However, my passion for fintech resurfaced a few years ago after exiting my own business, and the advent of Open Banking as an emerging industry looked exciting. I’ve been with Frollo for four years, helping clients harness Open Banking technology.

I’m Maëlle Debeugny, a Product Manager at Frollo, specialising in data. My journey into fintech began with a background in technology consulting, helping both traditional players and fintechs. Transitioning into fintech with Frollo three years ago was a natural progression for me, driven by a desire to create tangible solutions, get hands-on, and move the market. The dynamic nature of fintech continues to inspire me, and I’m passionate about driving innovation to create positive impacts in the industry.

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

Simon Docherty (SD): Traditional companies are often weighed down by risk aversion and legacy systems, hindering their agility. Fintechs on the other hand, demonstrate a willingness to take calculated risks, embrace emerging technologies and tap into new systems – which can help them minimise risks in the long run.

Traditional finance builds out risk frameworks within their business. That tends to limit what they can do, and rightly so – there are protections in place around cybersecurity, customers and compliance. However, fintechs can show banks how to do that while also achieving more for their customers and themselves as a business.

I’ve seen early adopters showcase the benefits of proactive risk management and a customer-centric approach, and it sets a precedent for incumbents to follow suit.

The words of P&N Bank come back to me here. At the time, Open Banking was opening up, they wanted to be an early adopter, and the way that they approached it was to take a “no regrets investment”. They could see that Open Banking was a trend that was going to continue, and they decided to invest early and put themselves at the forefront.

The other lesson is in what we see in our clients, in that they genuinely want to make a positive change for the customer. They are very focused on what they can deliver for their customers, which has benefits for themselves as businesses as well. This also enables banks to derive some return on the investment they’ve had to make through being a Data Holder in CDR [Consumer Data Right].

Maëlle Debeugny (MD): For sure it is prioritising the customer experience. Traditionally in the finance sector, the focus was very much only on getting returns and making sound, secure investments, with the customer experience being an afterthought. With the rise of neo-banks – they have shifted banking on its head and decided to start with the customer experience. They ask themselves, how can we make a more informative, seamless, transparent process for the end customer? That’s a key aspect that traditional banks now realise they can no longer neglect. Which is something we are working on with our clients using Open Banking.

With digitalisation on the rise, consumers now expect better experiences that make banking easier for them. To remain competitive, traditional banks need to adapt by further embracing digital solutions and enhancing customer interactions and expectations.

In what ways is artificial intelligence impacting the fintech sector?

SD: This is an interesting one. Frollo is a good example here. AI has taken off in the last 18 months and has become a bit of a ‘movement’ within fintech, in the same way that Open Banking did four years ago in some respects. It’s a hot topic at the moment.

Frollo has been using AI for a long time. We’ve always had machine learning models, and leveraging AI for data interpretation enables us to derive meaningful insights. It is core to what we do.

What that means for our clients is that by using our proprietary AI, we can take vast amounts of consumer data, make it usable, and deliver valuable intelligence from it. This enables our clients to analyse consumer behaviour and their competitors effectively, increase their share of wallet, drive informed decision-making, and manage risk proactively.

MD: AI creates a lot of space for experimentation, and the fintech sector is well-positioned to try things early and innovate – ourselves included. We’re looking at AI operationally for business efficiencies, to enhance our customer experience and support, and to continue to use the latest advances in AI in our products.

We’re a company that’s heavily reliant on data. Data is only as good as it can be used to generate quality insights and powerful use cases. So, from very early on, we’ve been using artificial intelligence and more specifically machine learning to make sense of consumer data that we’re aggregating. That means developing insights into transactional and accounts data, understanding the patterns and the behaviours and how these are shifting. AI is essential for us because we wouldn’t be where we are if it wasn’t for that. We can leverage the deep expertise that we have in this field to be of service to the products that we’re building for our clients.

These insights, coupled with the power of Open Banking, are in turn very useful to banks using fintech’s services, as they can get access to a single customer view and adapt their product offering, as well as facilitate proactive risk monitoring.

More broadly, AI can also help fintechs become more efficient by enabling their existing workforce to speed things up and spend less time on low-value-added activities. That’s very attractive for fintechs, who generally need to balance a tight workforce and resource allocation.

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

SD: Frollo stands out by offering end-to-end solutions that are all built in-house. Unlike most competitors, who only focus on data aggregation and have to partner to deliver customer-facing solutions, we actively develop and deliver solutions atop data, ensuring a seamless experience for clients. Moreover, our extensive experience in Open Banking, coupled with the largest data set in banking, provides us with unparalleled insights and capabilities to drive meaningful outcomes for clients.

MD: Our first-mover advantage in embracing Open Banking and our deep expertise in data aggregation set us apart. We’ve amassed invaluable insights from our large user base, enabling us to develop tailored solutions. Additionally, our commitment to empowering consumers through our free app underscores our dedication to enhancing financial well-being.

Recommended reading: Top ten breakthrough fintech companies

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

SD: Number one, not surprisingly, CDR remains an exciting space for fintechs, as Open Banking gains maturity and we see current use cases scale up quickly. Adoption from the big banks will move the market at pace in the next 12 months.

Also, Open Energy continues to gain more traction. Energy is a sector that customers are increasingly invested in through solar and batteries. How fintechs can innovate with customers will be really interesting, as I think there’s consumer interest and a clear benefit.

Secondly, continued advancements in AI technology are reshaping fintech operations and offerings. AI is still in its hype phase, but like us at Frollo, there are people already using it in very productive ways. Most of those are about internal business speed and productivity, and the customer benefit is indirect to using AI but still flows from it.

Lastly, a faster uptake of fintechs from traditional finance. One of the biggest challenges traditional finance has is the legacy systems they have built upon which slow their ability to meet consumer expectations of what modern finance should be.

Traditional finance has always relied on the “lazy tax” or the pain of change for consumers. Fintechs are making it easier for consumers to improve their financial circumstances and who they bank with/choose for finances, and traditional finance will need to acquire or partner with fintech in order to simply keep their customers.

MD: First, it will all be centred around accelerating payments’ use case. Given that we already have PayTo and payID here, it will be interesting to see what form this takes in Australia. No matter what, I think we’ll get more investment and company expansion coming from Europe.

Second, more innovation is coming out of blockchain and crypto to develop decentralised finance solutions. I think this is the future—I see both fintechs and traditional players investing in these solutions.

Third – generally speaking, innovation and improvement in CX, as previously mentioned.

Finally – what I’d like to see, although I am not sure it will be a top three fintech trend, unfortunately, is more investment and solutions emerging in the sustainability and ESG sectors. It is still quite niche in Australia and I don’t think it’ll become a major trend just yet, but I have my fingers crossed.

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

SD: We’ve seen a slowing and pullback in investment in the whole fintech sector. That’s led to sluggishness across the sector compared to where we were three years ago today. As the market slows, banks also become more risk-averse, which can start to delay projects.

By the same token, for us we are starting to see some of the big 4 banks move forward with Open Banking projects, which will move the whole market, as banks can’t afford to get left behind. Traditional finance companies are prepared to invest when they can see that the technology is right for their business. Additionally, when they see that the big 4 are getting into Open Banking in a big way, then they’ll also want to be jumping in as well.

Another challenge is mergers and acquisitions in the banking sector. We are in a necessary cycle of mergers and acquisitions at the moment, as banks look to scale to handle growing demands from tech capability and compliance. Fintechs who are working with banks or looking to work with banks can face challenges when newly merged entities consolidate systems and tech stacks.

MD: As Simon said, market conditions pose significant challenges for the fintech industry, leading to acquisitions and consolidation. However, with resilience and innovation, fintechs can navigate these hurdles and continue driving industry growth.