Today, the financial sector is bursting with innovation and many start-ups are in demand for the solutions they provide. When Al Karim Somji founded Zafin, a successful provider of relationship banking solutions to banks and financial institutions, he struggled to convince banks to focus on customer-centricity, a concept which is now at the top of their agenda. bobsguide talks to Al Karim about the challenges he faced founding Zafin, the lessons he has learned and the advice he would give to anyone considering a start-up business in the fintech industry today.
When and why was Zafin established?
Zafin was established in 2002 to transform the way banks do business. We wanted to encourage banks to become more customer-centric, rather than purely product-based – an idea that took a lot of convincing at the time but is much more widely accepted today.
What opportunities and challenges did you face when you first founded Zafin?
What we were aiming to do in 2002 was a totally new market niche that no other company had done before. We had the benefit of having the market completely to ourselves because there were no other competitors in this field. However, the biggest challenge was to convince banks and analysts that our proposition could actually be implemented and would add substantial value to their business.
Have banks always taken so long to come round to new ideas?
It took a long time for banks to get their heads around the idea of customer-centricity and we spent almost two years talking to 70 global banks, and various analysts. We weren’t actually able to deliver our service until 2005, when the CEO of one of the bank’s we had approached, understood the value of our proposition and was willing to take a risk.
Is it easier to launch a start-up today than it was 10 years ago?
It is a lot easier to launch a start-up today because developments such as cloud computing reduce any infrastructure investment, and also provides a much more cost-effective way of implementing and moving existing technology.
You’ve launched four other companies before Zafin, what have you learnt now that you didn’t know then?
All of the companies I launched were successful, except for one. The idea for this company was too advanced for the time, although the concept is something that is seen more today. Timing is key to start-up success, as is persistence. I have learnt that as an entrepreneur, you need to be able to consider risks but also take more chances. Failure always teaches you a lot of lessons and because one of the companies I launched failed on the content distribution side, I have learnt to be persistent and keep our customers and prospects engaged at all times by continuing to return to them to explain the value proposition.
What advice would you give to anyone considering a start-up business in the fintech sector?
There are three tips that I would give to anyone considering a start-up:
- Take a risk
- Be persistent
- Leverage the cloud infrastructure
What advice do you wish you listened to when you launched your first business?
The advice I should have listened to at the time was how to better leverage the resources that I had. Also I wish that there was more knowledge available about finding the right funding and advice about gaining seed and angel investment as you attempt to grow your company. This information is much more readily available today, through companies such as US global crowdfunding platform Kickstarter who provide a way of gaining seed funding.
Zafin was recently named one of Deliotte’s fastest growing technology companies – what do you think has helped you to reach this point?
A lot of our success has been down to the growth in the market and the 2007-2008 financial crisis which totally changed the way banks should do business and gave us the biggest opportunity to service this sector.