«Bringing People to Digital is Very Important»

Will Fintech disrupt the banking industry? How can digital finance bring prosperity? And how important is the WEF in this process? Here's Tansfergo-CEO Daumantas Dvilinskas with the answers.
24.01.2016 21:03
Interview: Ivo Ruch
Daumantas Dvilinskas: CEO and co-founder of Transfergo.
Daumantas Dvilinskas: CEO and co-founder of Transfergo.
Bild: ZVG

cash: Transfergo specializes in transferring money abroad. What's the your difference to companies like Western Union?

Daumantas Dvilinskas: Transfergo is a pure digital remittance player. We don’t send individual transactions across the border. Our principle is called local-in and local-out. Since individual transactions don’t cross borders and all is pure online, we’re able to do this 90 to 95 percent cheaper than traditional players. Our competitive advantage lies in two aspects. First, it’s the network of bank partners that we have and a huge network of bank accounts with which we are able to facilitate payout funds. Secondly, people love the product experience because it’s frictionless and clean.

In how many countries are you active at the moment?

We’re now servicing more than 40 countries. We have more than 30 major bank partners in our network and hundreds of hundreds of accounts. So it’s a large network.

Are you part of the traditional financial industry, or do you shake it up?

The reality in the market is that banking infrastructure is the only way how you can settle. Anyone else who claims to do something different is misinforming people. At the end of the day, the client needs to get the money. You can either get it with a cash payment or a digital payment. For both options you need a bank. I don’t know of any other player who is not doing it this way. The difference between us and others is that we go directly to the banks. Other players use third party infrastructure providers who give their accounts for them to use as a lease.

What do you think about crypto currencies? Would they be able to do something similar like your business?

What they are solving is the information exchange problem. And that’s a problem we’ve already solved. I can give you an example: With bitcoin you would know instantaneously that you received the money in the UK and then pay it out in Poland. Knowing that is not a problem. Without blockchain having our own network we know that already. The problem is the settlement. The money physically needs to appear in our client’s account as quickly as possible. Crypto doesn’t solve for that. If you want to take money out of crypto currencies into normal currencies it’s expensive and it takes a lot of time. The fastest we have delivered money into our client’s accounts was one minute and 25 seconds from the time that we’ve received the money in. This is the major point we don’t see being addressed by crypto currencies.

Transfergo focuses on markets with many migrants. Would Switzerland be an interesting market for you?

We always go for the main migrant hubs. We’ve started in the UK, Germany and Scandinavia. Switzerland would be interesting on that point of view. However, Switzerland is not part of the European Economic Area. Therefore, it requires a different set of licensing. That’s why Switzerland is slightly later on our roadmap.

You are from Lithuania. Why did you move your business to London?

I was educated in the UK which is my second home away from home. The second motivation was regulation. We knew the UK has got the most innovative regulators in Europe. Thirdly, London is a financial hub and one of the leading hubs in the world for Fintech. But we have more than 50 percent of our company based in Lithuania where we build products, technologies and other important bits and pieces. So we’re having the best of both places.

What is your professional background?

I am, what you might call, a Serial Entrepreneur. Transfergo is my third venture. I was lucky enough to get into this business of founding and building companies very early. I built my first company when I was 19. I built two businesses which failed, but this was a great learning curve for me. Ahead of Transfergo, I was in the content discovery space. In 2010, we had an idea to build Pinterest before Pinterest actually became what it is now. We had started this out of Europe which proofed to be a wrong strategy. We saw that such products need to be built in the US and then scaled across. And by time we got to the US, it was too late. Before that, we were in import export business. We were providing universities across UK with various merchandising equipment. And this is where the idea for Transfergo was born because we had to make frequent international payments to our suppliers. This business has led to a point when we figured out that Transfergo has to exist in order to solve problematic cases.

Is Transfergo profitable?

Currently we’re not profitable. Recently we’ve raised the seizable amount of 2,5 million dollars. We choose not to be profitable because we are growing. However we became profitable in our first 12 months of operations which has allowed us to grow quite comfortably in building the product and everything else. We’re in the space where we choose not to be profitable to facilitate growth but we’re never far away.

What are your next goals?

This year is all about growth in more markets. We’re now growing quite fast across major markets within Europe. We want to grab market share in the biggest quarters there and prepare everything for going global. We want to offer our service for all major currencies in the world and help migrants across the globe not just in Europe.

Could you imagine to sell your business?

We’re not for sale right now. We’re still quite early in our development. But of course we’re always thinking about possible acquisitions. Focusing on the clients and on the growth gives us probably the best chance to have the best possible exit later on. Because the quality of a consumer and the brand is what many of the traditional players would probably be interested in.

What is your vision of the financial industry in ten years from now? Which major changes do you expect?

Only four or five years ago the banking industry itself was built on the premise that banks provide many services to many clients. If you go on a homepage of a bank you could send money or get a loan or a mortgage. I see a change in that. From offering many to many to offering one service to a very specific niche and really focussing on providing superior product experience in that niche. I can see the shift happening from niche providers going after very specific needs of a client and offering them something that they haven’t been offered before. This transition is going to bring us from building monopolies to building great products. Because that’s what the consumers will demand in sort of more one to one environment. My vision is that there’s going to be a lot of value out of finance and Fintech going forward for the consumer because of this change.

You were invited to the World Economic Forum. How important is the WEF for a company like yours?

Being invited to this event shows a very rapid growth of importance of innovation and new players in the Fintech space. Because now we can actually talk directly with global opinion leaders and shape the future of banking. It’s old and new working together to reshape. Secondly, the WEF is probably the highest quality event you can ever imagine. You can actually push your business forward at the fastest possible speed through partnerships or media exposure. Thirdly, you meet all these people who are innovating in there respective spaces. This gives you a perspective on what’s the impact of technology on the world as a whole. If technology is not part of this conversation it’s very difficult to make changes. Because at the end of the day technology’s the major power in the world that’s going to create positive change.

Which was the most important business card you got in Davos?

I couldn’t tell specifically which one, but for ourselfes, media and investors are very important. Apart from that, we had a chance to hear Arianna Huffington speak and other high profile people. Davos will leave a certain memory.

From your point of view, what are currently the biggest problems globally?

Looking from our sector, financial inclusion is the one that I would focus on. It’s how you get people from using cash to going online. I was at a conference a couple of years ago. And Bill Gates said that if you were able to decrease the cost of remittances and international payments for the poorest of the world from 5 percent to 2 percent, you could lift a lot of people out of poverty. The main driver for that poverty is that people still use cash a lot. Including people into the banking sector as much as possible will bring prosperity. Then the financing is more transparent, it’s a safer and more inclusive system rather than using cash. Bringing people to digital is incredibly important and can have a long term effect on prosperity especially in developing countries.

Transfergo was founded in 2012 in London by Lithuanian migrants. Their idea: A system for foreigners to send money faster and cheaper back home. Transfergo is member of the Fintech-hub Level39 in London. Transfergo employs 36 people in London and in Vilius.