Raoul Mulheims (general & product management), Jonathan Prince (business development & partnerships), Georges Berscheid (technology & operations) and Didier Spick (finances and administration) took a moment to reflect on a journey that helped reshape some areas of the financial services sector in Luxembourg. Together, they share defining moments and how they connected the dots to build sustainable businesses and constantly meet market demand over the last 15 years.
Your joint entrepreneurial journey started when you founded Mpulse in 2006. You then launched Digicash in 2012. What were your expectations for the businesses, and 15 years on, how do these expectations compare to reality?
Raoul: People often think of entrepreneurship as starting a venture with the end goal and expectation of building a successful company. We were always a little bit different. After a first experience of building a digital agency from 1999 to 2006, we founded Mpulse and later Digicash with the strong belief that the products we developed should – above all – be truly relevant and bring genuine improvements for our clients and their customers. We certainly hoped that we would see success in some form, but our focus was foremost on presenting an outstanding product, getting stakeholder buy-in and convincing consumers to use the services and tools. In more general terms, when it comes to being an entrepreneur, risk is an unavoidable element of the game: when you start, it is never easy to anticipate precisely how things will turn out, and also find you are wrong most of the time! But when focusing on quality and added value from your customers’ perspective, you have a fair chance of success. We were very cautious about what we expected from the businesses and what success might look like.
Georges: I agree – and of course, I think as a team, we would all say that success is also something that is difficult to define. For example, we founded Mpulse back in 2006, when SMS payments were a completely new concept. Today, Mpulse handles 95% of all SMS payments and a significant part of professional SMS routing in Luxembourg and has been doing so for 15 years. One could say that this proves that the risk was worth taking. Equally, as entrepreneurs, what we view as ‘success’ is always changing. For example, since we launched Mpulse, regulations have changed. New telecom operators have entered (and exited) the market. Technology has evolved. Now we see the potential for Mpulse to do more; there is a substantial growth potential for donations or ticketing, for example, as well as for new messaging channels, critical notifications and even for traditional SMS marketing. So, there are still many ways for Mpulse to evolve, and our expectations and the way we define success will develop, too.
Jonathan: We also say that our achievements are not something we accomplished alone. For example, 2012 was a big turning point for us because we got our Payment Institution license for Digicash. That put us in the financial services sector for good. We launched Digicash in partnership with several Luxembourg banks, paving the way for higher-value mobile payments, a natural next-step on from Mpulse, which focused on low value payments. But to make Digicash a success, we relied on the banks’ trust, the confidence of retailers and bill issuers accepting mobile payments, as well as a R&D co-financing programme from the Luxembourg Government. We simply could not have done it alone, and we are very appreciative of that fact. As a result, it has always been important to us to promote and pay tribute to Luxembourg as an innovation – and more recently – a Fintech hub. Our success is directly intertwined with the role this eco-system played in supporting first Mpulse and then Digicash.
Mpulse and Digicash were founded before « fintech fever » hit Luxembourg. What is your perception of the build-up of Luxembourg’s current fintech, regtech and digital landscape over the last years?
Raoul: The fact that we are a fintech firm came organically. Six years ago, Luxembourg for Finance launched an initiative at the request of the ‘Haut Comité de la Place Financière’ to foster discussions among stakeholders and to gather their feedback on the technology, innovation and digitisation-related opportunities and challenges for the financial industry. At the time, around 40 stakeholders from various contexts and backgrounds came together to discuss Luxembourg’s future as a financial centre. At the meeting, KPMG presented a survey of the Luxembourg fintech industry. On a matrix featuring roughly 50 companies, we were surprised to see both Mpulse and Digicash sitting in a prominent spot up at the top among the tech firms of the financial industry, only very recently branded under the ‘fintech’ label.
Georges: We had never thought of ourselves as a ‘fintech’ firm – the term started to be commonly used in Europe in 2014 I think – but it was a great moment, and we realised that we were really part of something special. What eventually came out of that initial Luxembourg for Finance initiative was the creation of the LHoFT (Luxembourg House of Financial Technology). We have been a member since the beginning and contributing to its establishment and development was a no-brainer for us.
Jonathan: Finologee’s mission has always been to go the extra mile for our customers, providing something more than ‘just’ a product or technical solution. From our experiences with Mpulse and Digicash, we knew that there was a huge potential with financial services firms for process, execution, and customer interaction enhancement through technology. Still, it is challenging for them to engage with an outsourcing partner because of extensive policies, processes, and rules. The financial institutions’ regulated status also makes outsourcing difficult because complex regulations and legislation need to be considered to ensure they remain compliant with the law. With Finologee, our ambition was to help financial services players digitise and take advantage of technology and fintech within these constraints.
Raoul: Yes, I think this was really where the roots of Finologee lie. We had landed on ‘planet finance’ with Digicash and we managed to gain the trust of merchants and bill issuers, consumers as the end-users of the product, as well as several retail banks as partners and issuers of the mobile payment tool. For the latter, we discovered where embracing and integrating technology and fintech solutions challenged them. With Finologee, we decided to focus on solving this particular issue: we were passionate that we could help them outsource and benefit from new technological solutions and advances. As a result, a ‘Support PFS’ licence was part of the strategy from the beginning because we knew it would provide the right framework to make it substantially more convenient for the regulated financial services players to outsource and use our tech solutions. Finologee also aims to help Luxembourg’s financial services firms source the right providers to fit their specific needs and make it straightforward to integrate them within a regulated environment as part of the value proposition.
Georges: We also say that Finologee is a catalyst. We are huge advocates of digital platforms and technological solutions, and we know many players in Luxembourg’s financial services sector are too. Finologee’s aim is not only to bridge the gap between traditional and new players, but also to help financial institutions understand and choose the solutions, platforms, and technology relevant to them in the tech and fintech world. It is our aim to make it easier for Luxembourg’s banks, insurers and fund specialists to implement the tech products they need while honouring their internal processes and procedures, which is always central to regulated entities.
You are all seasoned entrepreneurs. How does that shape how Finologee services your customers and build your solutions?
Raoul: As an entrepreneur, your journey does not stop when you create and launch a product. As your products evolve and grow, you must adapt with them. Finologee’s philosophy has always been to continue to build our products to reach their full potential, while remaining flexible with regards to our role and position over time. We aim to serve as many stakeholders and customers as possible, in the most efficient and workable setup. For example, after we founded Digicash and saw its advancement, we knew that with the right partner and infrastructure, it had the potential to grow and serve even more customers and merchants. As a team, we felt we had to honour that potential and find a way to bring Digicash to the next level. We eventually sold the consumer-focusing part of the business, but we remain the technical operator. As a result, payment volumes having grown more than tenfold since 2017, and we are glad that we managed to position Digicash with a new frontrunner and within a new setup to ensure a sustainable evolution, and ultimately a successful execution of that vision.
Didier: Yes. Adding to that, I think that because of the variety of both the industry pillars and the roles we have been focussing on over the years as a platform provider, a payment scheme operator, an IT and UX specialist, a business and strategy consultant … I believe we are able to bring a solid expertise as well as fresh views to the table. We spend a lot of time asking questions and truly listening to what our clients consider their ‘pain points’. Our key challenge is to find the right angle to help them in what we consider our comfort zone, for instance to discover how we can be the missing link between financial institutions and fintech providers and products. Offering workable and accessible solutions that make a difference to all stakeholders is what Finologee is really about. Also, because with Finologee we also hold a financial industry licence, and we set up a regulated payment institution with Digicash as a team in the past from scratch, we believe that today we have a quite good understanding of the specific challenges financial professionals are facing in the areas that we cover. One could say that we allow them to pass a part of their regulatory burden to us.
Jonathan: I think we would also say that entrepreneurship has shaped Finologee immensely, and our customers benefit from that a lot. We use the experience we gained in all our past ventures to bring better solutions to the market. For example, our journey started with Mpulse with micro-payments by SMS. Then came Digicash, which paved the way for electronic payments of larger amounts and exposed us to the financial sector. That all led us to setting up Finologee, which encompasses all our experience, where we serve and partner with institutional players, supporting them in embracing digitisation, user experience optimisation and automation by leveraging modern technologies.
What sets you apart from other companies and players in the sector?
Jonathan: Our company is 100% entrepreneur-owned and managed. We have been in the industry for a long time and built three other successful businesses since 1999, and by now we feel like most of the times we have a good idea of what works and what does not. The four of us have worked together for more than 10 years as an efficient team with talents and skills that complement each other in our respective roles. I think this makes Finologee completely unique in Luxembourg.
Didier: As a team, but more broadly as a company, we are completely dedicated to build truly relevant products, to create something new, to envision things differently and above all, to help our clients to digitise easily and efficiently. This takes quite some time, a lot of energy, discipline and requires a true focus on efficiency. We see it as a kind of craftmanship, with great attention to detail, but always keeping the goal in mind. This leads to loyal, long-term customers, and of course the fulfilment of the craftsman who is honoured to help.
Georges: I agree. In today’s digital world with all the platforms, frameworks, and tools available it is fairly easy to build and launch a product, and assume it has great added value just because it is new and/or innovative. But this typically doesn’t work when you enter the fintech arena … as several levels of regulatory compliance kick in: the client has its obligations, the provider needs to meet certain criteria and deal with specific requirements and potentially hold a licence to be allowed to deliver outsourced services, and finally, the product also needs to meet security, resilience, performance and transparency conditions, among others. Finologee’s philosophy has always been about offering high-value solutions that truly meet our customer’s needs and solve real problems. Our ambition is to come up with a value proposition that meets all criteria at all levels, facilitating the adoption of our products by regulated entities, addressing all these questions. I think all entrepreneurs naturally want to move fast, but in this case, it is a bit counterintuitive, as we cannot focus on speed as the key factor when it comes to compliance, as well as for product and operational resilience. By the way, the same principle also applies to our R&D efforts. Our priorities are quality, value, and customer satisfaction, and we will not sacrifice those for a quick win or an unfinished product.
Raoul: Absolutely. In our field, it can be relatively easy to aim for the fast fixes, but it is not what Finologee is about. It really takes time to listen to your customers and understand what they need at a granular level, and then build a fitting product. We have only ever launched products that we genuinely believe add real value for our customers, and we never take anything else to market. Our customers know this, and I think it is one of the reasons we have been able to grow our businesses steadily over the last 15 years, with a very high customer retention rate. It is one of Finologee’s hallmarks – and one we are especially proud of.