Greg Einfeld, Director at Plenty Wealth outlines his journey in fintech and where he sees his business, and the broader fintech landscape heading.
About the fintech:
We (myself and co-founder Josh Golombick, and all our staff including offshore developers) have two digital advice businesses. The first is Plenty Wealth which imports transaction data from customers’ bank accounts, asks a few more questions, then produces a comprehensive financial plan which covers budgeting, cash flow, super rollovers, super contributions, pensions, debt, insurance, and investment. The scope of the advice is similar to what you would expect from a human adviser. The differences are speed (the advice is produced instantaneously), accuracy (human advisers can’t get an accurate picture of their clients’ spending), and cost (our advice is free). Then we charge a small fee to clients who want to speak to an adviser by video conference, or want help with implementation.
1. What skills do you need to succeed in Fintech/Insurtech today?
- Creating algorithms – I often hear financial advisers say: “You can’t replace my 20 years’ of experience with an algorithm”. Ultimately when financial advisers make recommendations, they are basing their advice on a set of rules. Whether they realise it or not, there is an algorithm going on in their head. The skill is to be able to codify the set of rules. You need to work out which rules apply, when they apply, and what order they apply in.
- Financial sector knowledge – Actuaries tend to have a broad knowledge of the financial sector, the established players, the competitors, the regulatory landscape, and the products which makes our skills sought after.
- Perseverance – start-ups are hard work. There are times when you feel like throwing in the towel and only the most determined people can be successful. Actuaries have this skill by definition. Quitters would never have made it through the qualification process.
“Actuaries have this skill by definition. Quitters would never have made it through the qualification process.” – Greg Einfeld
2. Describe the highs and lows of an entrepreneurial path in Fintech?
I’ll start with the lows:
- You need a unique business name that is memorable, short, easy to pronounce and spell and trademarks all need to be available.
- Everything takes longer than you expect. Our software developers told us it would take four months to build our product. It took three years.
- The money is always tight. It is hard to raise capital externally until you have revenue. Until then you are constantly juggling costs.
- It is harder to get customers than you expect.
But it’s all worth it when you experience the highs:
- Finally landing on a business name, logo and brand that resonates
- Launching your product
- Getting that first customer
- Watching the revenue grow from month to month
- Getting publicity
- Getting great customer feedback
3. Where do you see the company in 12 months? What about five years?
Plenty Wealth is currently spending little on marketing while we optimise conversion of leads through to revenue. Over the next year we plan to get to the point where the lifetime value of a customer exceeds the cost of acquiring those customers. In about 12 months we expect the open banking regime to commence in Australia, which will allow us to import customer transaction data without those customers providing their banking credentials. Over five years we expect to see the fintech landscape mature and transform and that Plenty Wealth will become an important component of many other fintech platforms.
4. What’s your top tip for actuaries wanting to move into this space?
For those that want to be founders – a lot of the good ideas are already being worked on, and if you don’t start within the next one to two years then you may miss the boat. While you don’t have to be first to market, you need to be a fast follower. In many tech businesses there will only be one or two winners.
For those that want to work in a more established fintech – make sure you understand the culture of the organisation, and check that they have enough capital to pay the bills including your salary
5. What has had the most influence on your professional mindset?
The bible of start-ups is a book called “The Lean Start-up” by Eric Ries. There are a lot of parallels with the Actuarial Control Cycle.
I own another business where we automated a (previously manual, repetitive, labour intensive and error laden) process to produce thousands of automated reports each year. Once I saw how customers embraced the faster, easier and lower cost solution, it was an easy decision to move onto the next business.
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