#425 Transforming Fintech with AI: Hamel Kothari on Building Scalable, User-Centric Solutions

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Mehmet: Hello and welcome back to a new episode of the CTO show with Mehmet. Today I'm very pleased joining me co founder and CTO of Brigit Hamel Kothari. Hamel, thank you very much for being with me here on the show today. The way I love to do it is I keep it to my guests to introduce themselves to [00:01:00] us. Tell me a little bit about, you know, your journey, you know, your experience and what you are currently up to with Brigit.

Hamel: Yeah, absolutely. Thank you for having me. Um, so my background, I, I started my career, uh, in tech, uh, a little over a decade ago. Actually a Palantir, where I was very lucky to get sort of my first exposure to cashflow data, people's bank transactions, which is at the heart of what I work with today. Um, it was a really interesting time for me to be there.

Hamel: After that, spent a couple of years working at various financial services companies here, uh, in New York, um, before I started to have that itch that a lot of people in tech have to, to start my own thing. Um, but I was really. Adamant about if I was going to start my own company, it was going to be something that I felt really good about coming into work on every day.

Hamel: Something where, you know, I also felt like there was a real. Business to be had, but it had to be both of those things. And so I was very lucky to have gotten introduced to my co founder Zubin, who's, who's our CEO through a former colleague of mine. And through that process, um, you [00:02:00] know, in talking with him, we started to talk about the power of, of cashflow data of people's bank transactions and how that was becoming readily available when we got started in 2017.

Hamel: Uh, and realized that there was a real opportunity here in the U S to. Use that really rich data that was becoming available to get people access to the financial services that they needed, uh, in a way that historically they hadn't been able to get access to. Um, and so that's where the idea of Brigit kind of came to be was when we started looking at the numbers here in the U S and understanding the sort of financial health.

Hamel: Of most people in the U. S. We realized, wow, there's 100 plus million Americans living paycheck to paycheck actually now in 2024. That number is closer to 150 million Americans living paycheck to paycheck. It's a number that's been growing. Unfortunately, due to the macroeconomic climate. And so we realized we could look at people's cashflow data through data aggregators like plaid and others that were coming into being and use modern sort of machine learning and AI technologies to [00:03:00] understand their risk and get them access to the services that they need.

Hamel: Whereas if you just judge them on their credit score, maybe you wouldn't have been able to get access to those services. And so that was sort of the. The, the sort of genesis of, of what we came together to do was we saw this massive problem of financial stress, this availability of new, really rich data, interestingly enough, a piece of data that I had gotten a little bit of exposure to in a prior part of my life.

Hamel: And so it was sort of all of those things coming together, um, where we realized there was a real opportunity and an opportunity that hit both of those two tenants that I was looking for a real viable business to be had. Especially when you see that Americans are spending billions of dollars in overdraft fees.

Hamel: Um, this is a viable alternative to help with that. Um, but also one that, you know, you're helping people who are struggling financially. So one that I could feel really good about. And so that's kind of the journey as it brought us to, to coming together. And so today, What we do here at Brigit is we solve basically short term financial [00:04:00] stress and help people get on the path to better financial wellness through a financial health app that we provide to our customers.

Hamel: Um, we'll help them avoid things like overdrafts. budget better, build, uh, up savings and build up their credit history, uh, and help them find opportunities to save on things that they're already spending on all through sort of our holistic app. So that's what Brigit does today.

Mehmet: Great. And, um, thank you again, Hamid, for being here with me today.

Mehmet: Um, being in, you know, the, the finance or like Let's call it, uh, the broader anything related to money Uh, it's not an easy thing, especially, you know from you know technology perspective So anything special, you know coming from you are you are the cto, right? So so you come from the technical background anything why you know Have you decided to?

Mehmet: Go with this vertical specifically rather than maybe, I don't know, like plenty of other [00:05:00] options out there. So, what attracted you to this domain, I would say?

Hamel: Yeah, you know, I think I was maybe a little foolish coming into it that I thought it would be a lot easier than it actually was in practice. As, as you said, financial services, fintech, there's a lot of barriers to entry, both ones that are visible, but also ones that are not really visible.

Hamel: So, for example, compliance is a huge barrier to entry that once you start working on it, you realize, oh, there's so many boxes that need to get checked. So many things that need to get taken care of the number of partners to launch any sort of product, uh, is very high. And so there's a lot of sort of partnerships you have to get in place before you can even test something with your first customer.

Hamel: And so there was a lot of. Of, uh, various entry when we got started that maybe I was a little more naive to my co founder. Thankfully, you know, had had a lot of the insights that he kind of knew what he was getting into. So part of it was a bit of naive to say that I didn't realize how hard it was going to be.

Hamel: Um, but the other part of it, as I said, [00:06:00] was. Uh, it was, it was very rare. I talked to a lot of other sort of entrepreneurs before I got started on this, and it was very rare for me to find an opportunity where there was going to be a definitively sort of viable business. And for me, the metric that stood out to me with, with the idea of Brigit was that Americans were already spending, uh, billions and billions of dollars in overdraft fees.

Hamel: I think when we started, the numbers were around 34 billion in overdrafts being spent every year. You know, when we looked at the sort of finances of some of our customers, we were seeing that these were people making 40, 50, 000 a year spending 1, 000 in overdrafts, so they were already spending money to get access to a service that we thought we could build more cheaply.

Hamel: Um, and they were spending a lot of it. So we knew that there was an opportunity for people to have a willingness to pay, but also they were spending so much on it today. Or when we started that we realized that there was a huge opportunity to also deliver value back to them so [00:07:00] we could feel really good about building a business that was helping people because it was essentially putting more money back into their pockets where they were already spending on fees.

Hamel: We would be able to provide it at a lot cheaper. Um, and so those 2 things, when you put them together, you have a business that. You know, definitively you think you can make profitable and sustainable, but also one that every day I got to come in and feel like, you know, this was a, uh, when it was going to be hard, I knew that there was a customer on the other side who would really value the service.

Hamel: Um, that made it a no brainer to start, you know, whatever barriers to entry will sort of tough through because I had talked to enough people to know that very rarely do find both of those things.

Mehmet: Right. So, you know, like finding that you have a product market fit, I don't think it took long. Use so much time to get it and you know the problem because you know, this is kind of a global podcast, of course You know funny enough i'm based in dubai majority of my audience are in the u.

Mehmet: s So i'm 100 sure like, you know, they get what you know the problem you just mentioned but it's a kind of a universal problem People, you know living on paycheck to paychecks now [00:08:00] if I want to You know, go and understand the way you help people to, to manage, you know, their finances and, you know, to avoid, you know, paying the fees you just mentioned.

Mehmet: Um, so if you can explain me like a little bit, the technology behind it and at the same time, because I know that you had some fantastic growth also as well and adoption for, um, for your solution, um, which like it, it. Also, like, uh, was very obvious in your revenues and so on. So, like, if you can walk us through having, like, little bit about, you know, how the technology exactly works and how you were able also to make sure that it scales with the demand, saying that majority of the people in the U.

Mehmet: S. They are having. Yeah,

Hamel: I'll sort of start first from the customer's perspective and talk about what the products are and then sort of flip back to how we power it on the other side. But when we first got started, the first problem [00:09:00] we were really looking at for our customers was overdrafts. They were overdrafting frequently, which means they're going negative on their bank account and their bank was fulfilling the charges, but they were getting hit with a 34 fee for every transaction that they made.

Hamel: Yeah. And so that's how those fees really piled up. And so when we looked at this, we realized, Hey, these are individuals who are living within their means. They're not sort of spending more than they're making, but because of the way that pay schedules work in the U S they're subjected to a timing mismatch.

Hamel: My bills are due today. My paycheck's a few days away. I know I'm going to be good for it. The funds are coming. I can see it in my payroll account, but I don't have it in my bank account, which means I can't pay my bills. That's why they're overdrafting. And so our first product, which we call instant cash was essentially to solve that problem.

Hamel: Sign up with us. You'll link your bank account. So we'll use a data data aggregator, and in our case we use plaid to connect to your bank account and get access to your bank transactions. And then using those bank transactions will understand you, understand how much you've earned, understand your [00:10:00] overall sort of risk, and make sure that yeah, this is someone who's living within their means, uh, but they are subjected to that timing mismatch.

Hamel: And then we'll essentially advance them anywhere from 50 to $250 at any point in the month that they need it to be able to pay those bills. So instead of going into overdraft and going negative and paying 34, you sign up for a monthly subscription for less than 10 bucks a month, you'll have the funds that you need to pay those bills.

Hamel: So it's cheaper than your first overdraft. And for most of our customers, they were spending multiple overdraft fees in a month. And so it's substantially cheaper than what they were doing before. And so that was kind of the first product that we had. And then over time, as our customer base grew. You know, because again, as you mentioned, people are already spending a lot of money.

Hamel: That's where I think it was very clear that there was product market fit because it was way cheaper. You know, word sort of spread and we grew very quickly on that. We also realized, well, that's not the only financial problem they have. They also struggle to stay on top of their finances generally. So we built out some budgeting tools into the app.

Hamel: We realized from looking at their [00:11:00] transactions that sometimes they were maybe overspending on things like insurance or on other financial products. And so we built out a marketplace in our app to help them find access to cheaper services, to drive down their cost of living. Uh, and then, you know, we also realized that a big reason why they were overdrafting or in this challenging situation was because they didn't have access to traditional forms of credit because in the U S you're judged primarily on your credit score.

Hamel: And so what we built out was a product to help them save a little bit every month, but also demonstrate repayment history and build their credit history by. Using our credit builder products. So that's sort of a savings credit building combination product. And so that's kind of how our suite evolved.

Hamel: And at the heart of it coming to the technology, as you said, was really the ability to get access to people's cashflow data and then work with that data. And that's not something that's very easy because if you think about it. Every individual, if you look at your bank transactions, you've got thousands of transactions over the past few years to be able to get interesting insights out of that with a scale of [00:12:00] millions and millions of users, you need to be able to sort of have the, the, the technological skills to be able to analyze that stuff in real time, to be able to build sophisticated machine learning and AI models on top of that, to be able to understand credit risk in a way that.

Hamel: That you can sort of predict whether someone's going to be able to, to sort of pay back the funds that you advance them. And so that's kind of the technology platform that we essentially built was this platform that takes in people's bank transactions, derives a ton of different, really valuable insights for a bunch of different use cases from.

Hamel: Underwriting and understanding risk to, um, to finding opportunities at the right message and send them the right message at the right time to help them save a little bit of money or give them a sort of financial piece of content that's going to help them based on their current status and their financial journey.

Hamel: And so the, the sort of core tech that sits under our product is really, uh, a cashflow analytics and automation platform that, that works off of that transaction data for. [00:13:00] millions of customers across the US.

Mehmet: Yeah, it would not take a lot for people to guess that, of course, because you're collecting a lot of data that you're leveraging AI and machine learning in all this.

Mehmet: So, uh, and I know this for, in fact, of course, of course, you know, I was doing my research. So, uh, How, you know, utilizing machine learning and AI allows also to offer things that maybe traditional lenders, they don't do and how it makes also better. Probably, uh, from I would say user experience perspective because we're dealing about, you know, making it money available for them to withdraw or utilize it or whatever.

Mehmet: So, so this non friction also like how much, you know, AI and machine learning make it possible. And, you know, if there's another use cases where you are leveraging to the AI and the [00:14:00] ML, you want to tell us about that would be great also as well.

Hamel: Yeah, at the heart of it. I think that the most important thing that we want to do really well is make sure that every customer has access to the funds that they need to be able to spend without stressing.

Hamel: Right? And so the first and foremost, this isn't the only use case, but the area where we spend the most of our time is really being able to understand risk and predict whether or not someone's going to be able to pay that back so that we can approve as many customers as possible. Uh, you can really mitigate your risk in a business that that advances funds by just not advancing to anybody.

Hamel: But then, you know, people don't get access to your product, and that's not a good experience for them, right? So our goal is really to do the best job in underwriting these customers and understanding their financial state so that we can, Approve as many people as possible. And that's kind of our bread and butter of where our models really shine.

Hamel: The most is, you know, ultimately a lot of people in financial services are building models to understand credit risk. We think we do it [00:15:00] exceptionally well, and that's why we're able to underwrite so many customers and get them access to our services with really high approval rates. So that's kind of since day one, that's where we spent the most time is really doing that.

Hamel: But as we got more customers and more data and they were spending more time on our product, it didn't make sense to just stop there. Obviously, that's where we're going to see the best return. So we're going to spend a lot of time. But we also realized, Hey, every single time that you transact every single time, a moment passes.

Hamel: In your bank account, you're in a slightly different financial state and there may be something useful from that data that we can glean to help put you in a better position for the future. And this is where I think we really start to step aside from kind of what other financial services institutions are doing.

Hamel: It's really taking that data and using it at every moment that there's a change. To make a prediction about what's going to be useful to you. So it's not just understanding your risk, but it's saying, Hey, your electricity bill just came in and it's the winter and you know, there [00:16:00] are repayment programs or payment assistance programs put on by your, uh, electricity company.

Hamel: Using, putting those two things together and using it to send a notification that's actually useful. We don't, we may not make any money off of that, but it puts you into a better financial state and that builds a lot of loyalty for our brand. And so there's all sorts of things where sometimes it's going to be, Hey, it looks like you're about to overdraft.

Hamel: Why don't you take an advance? Brigit's got you covered. Sometimes it's going to be looking and saying, Hey, your electricity bill is looking a little high. Let's help you find a way to lower that. Sometimes it's, you know, Hey, your car insurance is a little bit higher than usual. We've got a partner that's going to help you save money.

Hamel: So looking at that whole financial journey and reacting in every moment that we see a transaction update for every single customer doing something that's personalized for them is really what we do well. And I think what, uh, very few, if any sort of other financial services institutions are doing. Uh, with that really rich data that they're sitting on top of.

Mehmet: So it goes beyond, you know, just [00:17:00] providing them the cash when needed. It's also tries to predict their cash flow, you know, during the month. And, you know, so they avoid maybe misspending here and there. And maybe it provides them. and holistic approach of managing their finances. So which is, and I like, you know, the customization because of course you, you collect the information per individual.

Mehmet: So this, you know, allows you to, to, to customize and personalize. This is a lot mentioning this. Of course, like financial services are like the most, uh, and, uh, um, you know, the highly, uh, regulated, uh, vertical, I would say, uh, along with, with healthcare, of course. So what are the challenges and the risks, you know, when.

Mehmet: trying to implement kind of, you know, this AI technology that needs to handle sensitive data for customers. So if you can walk us through and how you overcome them, [00:18:00] indeed.

Hamel: Yeah, I think there are a handful of different Constraints that we have to operate under. I think it really depends on every product here in the U.

Hamel: S. At least is regulated somewhat differently. And in fact, it's also regulated somewhat differently in every single state. And so you kind of have to be aware of what the corresponding regulations are in each and every state. But largely the stance that's been taken in, uh, in the U. S. has been that people's cash flow data, their bank transactions is their own data that belongs to them, and they're providing it to us to be able to use to provide them value added services.

Hamel: And so in that way, it helps that this is essentially user permission data that's given to us. that we're able to then use to provide them services. And so that that sets the stage for it's a little bit easier to work with this data, actually, frankly, then, you know, if it's a credit bureau data where the credit bureaus are collecting that stuff [00:19:00] without your permission and potentially, you know, they, you're getting it, uh, there's a higher barrier for, for you to be able to work with that.

Hamel: So cashflow data, because of its, it's sort of nature, um, is a little bit easier to work with these days. Then. For example, things like credit bureau data, but, uh, once, once you sort of have permission to use the data, then it becomes a question of really, it's, it's a lot more challenging to find a product that you're going to be able to offer to customers that, uh, you know, fits within this sort of federal and state regulations.

Hamel: And so for each product, less so to do with the AI models or the machine learning models that, um, That, uh, you're using to actually, you know, underwrite or understand customers a lot more of what you have to figure out is, you know, the structure of the product, the corresponding fees that may or may not be associated with the product and making sure that that fits within federal and state regulations.

Hamel: And that's where the barriers to entry tend to be. And depending on how that product is structured, you may [00:20:00] need to get licenses or registrations in some states. Some cases you could have to get 50 of those across 50 states. And so that's where the barrier to entry really exists is it's less so about using the model to understand the customers and a lot more to do with just what is the product that you're offering.

Hamel: At least historically, that's been the case. There are a few more states now in the U S that are, um, getting a lot more attuned to the use of, of AI models. Generally speaking, um, I think Colorado has a law that is, is, has recently been passed with respect to AI models, where I think you need to sort of get certain extra permissions and usually there are additional disclosures that you're going to have to put forth to customers.

Hamel: Um, but, uh, I know California also has, has a law like this. So there are more and more states that are. Looking closely with how people are using AI, but a lot of what that manifests for companies like us is going to be increased disclosures to customers. Yes, you're allowing us to use your data to be able to better serve you.

Hamel: Things like that. You've [00:21:00] probably seen prompts like that on applications that you sign up for. You're going to see a lot more of them over time. I think

Mehmet: right now, interesting point here. You know, About utilizing the same model and I'm not sure if you have plans for that haven't so Because you have this applied and I think the u.

Mehmet: s. Because I have a lot of friends living there So I know how the system works and you know to me like if you apply something to the u. s You could apply it like maybe to other countries. So how easy is to port this to other countries? I mean from technology stand of point of view from

Hamel: a technology standpoint not very hard.

Hamel: I mean Bank transaction data exists in every other country. I think our models probably have a lot of broad applicability to other countries in their current form. And even if not in their current form, our features probably are still very applicable. And that means we could train new models in other countries without too much work.

Hamel: But the, the challenge with financial services, and this is why you don't [00:22:00] see many multinational financial services firms. Uh, regulation, you know, they're about only about half of our company here in the U. S. Is, uh, Brigit is engineering and product. The other half is all of the other operations that are required to support our business, and not all of that will port very well to another country.

Hamel: If we, you know, go to Europe, there are totally different banking laws. There are going to be totally different regulations. Payment system sitting under that banking system. There's going to be a different way of operating. So our operations teams are also going to look very different. And so there's very little applicability on the rest of the side of the business to other countries.

Hamel: And so we'd have to figure out a lot there. And so for us, we're really focused today on. How do we continue to broaden our sort of impact in our customer base here in the U. S. Play to our strengths where we already have the infrastructure and the resources. Um, but, uh, I think there is a world in which this could make sense, you know, outside of the U.

Hamel: S. But we're gonna need to be much bigger, I think, to [00:23:00] support that,

Mehmet: right? So if I want to stay in the U. S. How or is it applicable to be to be, for example, maybe small medium businesses? Is Like is there such use cases also for them because I know for a fact that they have all over the world I'm sure the same in the u.

Mehmet: s Cash flow issues also as well. So would that be a possible use cases in the future? Of course

Hamel: Yeah, I think when we first got started we definitely saw a lot of sole proprietors joining our platform early on because Um, uh, sole proprietors are a very large population of folks who overdraft frequently, their cashflow mismatches tend to be slightly larger.

Hamel: They swing more frequently. And, and as you said, it's, it's a, it's a very common problem. So we definitely saw a bit of that. I will say it's also. Substantially easier to work with from a regulatory perspective, merchants than it is individuals, the regulations on consumers are much more [00:24:00] strict here in the U S than they are on small businesses.

Hamel: Um, so there's definitely some opportunity there. I will say a lot of people are serving that market already because it is easier to work with. So, you know, whether it be the squares of the world, or I guess the blocks of the world, you know, they offer merchant cash advanced products, which I think serve this exact use case.

Hamel: There are a lot of other providers out there that do it. And so for us today, we're really focused on the consumer with the consumer really being an individual. I think there's some overlap with those sole proprietors. Um, but as, as that use case becomes more of a business use case, the swings get larger, the frequency of it changes and the sort of, um, the, the, the financials of the business look a little bit different.

Hamel: And so that, that isn't as much where we tend to focus. But it's definitely a similar problem.

Mehmet: Of course, 100%. Yeah. So it's a common problem, but I can't see the you know, how it can be applied even in different geographies also as well. [00:25:00] So, uh, and to SMBs as well to individuals. Now I gotta ask you something.

Mehmet: It's not much technical. It's more like on, I would say the business side. And again, I'm focusing on the FinTech or like financial services. So this sector more than any other sector, it's pretty much, uh, affected, I would say, by the macro and micro economics, right? So whether that's some crisis on the horizon, you know, some spending habits that change with people, maybe sometime again, we're maybe repeating some of the points, the regulations that might change.

Mehmet: And, and I know like in the U S these nuances between the states and so on, and how much, you know, You can you can't expect, for example, what would happen. So but while building, you know, Brigit and, you know, during the operations. So what was your strategy to stay strong? I would say. And of course, because as a leader yourself, Hamel, [00:26:00] I know you take care of everything technology, but you know, you need also to make sure that the team, you know, is is.

Mehmet: Again, understanding, you know, these dynamics and these changes. So if I want to ask like how you make sure, especially in such very volatile, I would say vertical, which can change with the micros and macros can be resilient. And, you know, how this may be also affected your leadership style with, with the rest of the team?

Hamel: Yeah, it's a, it's a very, very important question for our business, because if I kind of tell you the years, we started in 2017, we officially launched the product sort of nationally in the U S in 2019. And you can imagine what happened in 2020. So we always, I think when we were starting out, we raised venture capital and we, um, we, Thought a lot about some of these sort of more existential risks for the business macro [00:27:00] being kind of one of those.

Hamel: Uh, and one of the things that we always kept in our back pocket that we were confident in was this customer base that we work with customers who are struggling financially, sometimes referred to as subprime, uh, here in the U S or, um, you know, low income populations. When you look at their overall sort of risk levels.

Hamel: Uh, they tend to be higher than, you know, someone who is prime or someone who is high income. That's sort of a given. But, what you see is actually in periods of crisis, this population tends to fare relatively better than other populations. So, than high income populations or otherwise. If you go back to the 2008 financial crisis, you'll see that there's much lower volatility in the risk.

Hamel: In this population than there was in sort of high end populations. And the reason for that is their financial lives are already so stressful. They have far more coping mechanisms. They're [00:28:00] already, um, you know, they're already well practiced in dealing with that volatility. So additional volatility getting added to them, it definitely goes up, but it doesn't go up nearly as much as in really high risk populations.

Hamel: So that was something that we sort of knew in our back pocket was. If there was going to be some sort of stressful macroeconomic event, our customers. Would probably, if we can figure out how to support them in the good times, in the bad times, we were probably going to have an easier time than sort of some of the more traditional financial services firms.

Hamel: But that wasn't really proven until I think when 2020 happened, you know, here in the U S we had mass lockdowns. And I think when you look at our customer base, one of the. One of the things that you'll see is the largest population of folks who, uh, use overdrafts or use our product or people working hourly jobs in retail, food service, hospitality, things that were really, really dramatically affected by COVID.

Hamel: And one of the other things, so obviously [00:29:00] that was a huge concern for us when that started to happen was all of a sudden, you know, we're advancing funds to people. What's going to happen? Are these folks going to lose their jobs? You know, what's that going to do to our risk? Are we going to be able to sort of survive this situation?

Hamel: Um, but this is where I think the power of that cash flow data, the bank transaction data really starts to shine again is because we could see not just okay, this is a person making 40, 000 a year, but this is a person who's making 40, 000 a year. Uh, where, uh, they, uh, are working at a coffee shop or they're working at Disney or they're working, you know, we could, we could get a much more sort of granular understanding because we could see that data in their transactions and understand, okay, where, what pockets.

Hamel: Are we going to be, uh, need to be more mindful of with respect to risk and then use that cash flow data to figure out, okay, what, what can we tune in this population rather than cutting [00:30:00] off access to individuals, you know, can we continue to provide them service, but adjust their limits to make sure that it's commensurate with the overall risk that we're taking on.

Hamel: And so that cash flow data gave us the ability to. React very quickly to what we knew was going to happen, have really good visibility into our portfolio, and then make very targeted small changes rather than needing to make broad sweeping changes to make sure that we manage the overall customer experience and manage the, the portfolio that we have to, to minimize the amount of risk, but not need to just sort of go in with an ax and chop off.

Hamel: Whole bits of, of the, the sort of portfolio instead, you know, really finally with a scalpel, it gave us the tools that we needed to be able to react. And so, um, I think we had always thought that we were going to be able to manage really well. Um, but in practice, when the time came, we realized we had this really great piece of data and this great piece of technology that we could leverage to make sure that we actually sort of managed well through that period.

Hamel: And then. Thankfully, the [00:31:00] government sort of stepped in and ensured that, you know, people had the money that they needed. And we found ourselves in a totally different situation where actually our customers, thankfully were better off than they've ever been financially. Through the pandemic. And so that's actually where our credit building product kind of came into being was we realized, okay, now our customers have a thousand, 2, 000 in their bank account for the first time.

Hamel: They don't need help with advances right now because they have a huge cash balance. What they need is they need a tool to help them save a tool. That's going to help them have a better financial foundation by building their credit score. And so that's where we started to work on some of our other products to help them make the most of those dollars that they found themselves with.

Mehmet: You know, it's, it's a story to be, to be told because, you know, especially COVID was tough on every single business and of course on startups as well. But, you know, I, I liked the way how you looked at it, right? So, It's like converting what looks bad into something which might be Actually useful [00:32:00] for the customers and for the company, of course and the turn to be out You know a good decision that you've made and you know I like these stories because it it teaches all of us like, you know, of course When we pass it, it's tough you have you know, all these millions of questions in your head Okay, what's gonna happen?

Mehmet: Are we going to be able to continue at the end of the day? You If you are like kind of have built this risk assessment plus, you know Plan B mentality and being able to be flexible. So it makes the business thrive In the end, which is really inspiring. I would say Hamel now If I want to look ahead a little bit and ask you kind of innovation um Probably you're expecting to to happen in this in this field.

Mehmet: Um, you are in a very Important aspect of the fintech chain, I would say because you know [00:33:00] Fintech has a lot of things that we can talk about maybe for hours But this is something that affects people lives, right? So so it's like about having the cash flow and the ability to manage their their Their budgets.

Mehmet: So how do you envision, you know the future and especially with the advanced technology? You know, technology that we are seeing where we're seeing where you are seeing things heading.

Hamel: Yeah, I think we sat at a really interesting time when we, um, When we started Brigit, uh, in 2017, it was a period where data was becoming available, payment processing technology was becoming unavailable that dramatically reduced the barriers to entry.

Hamel: There were still definitely barriers to entry, but it reduced the barriers to entry to be able to offer financial services products. And so when we got. Together in 2017, we, uh, started with this one product that we knew we needed to build, uh, and essentially, you know, it was referred to as a period of unbundling where people realized that they [00:34:00] could offer services more cheaply than the traditional financial institutions.

Hamel: And so they went off and did that ourselves included. And from 2017 to 2021, 2022, tons and tons of funding flew into Fintech to be able to support people building these new products. And often really the, the, the key innovation here was taking these new technologies and using it to build cheaper services for customers, ultimately deliver a better, higher quality service for less than your big bank down the block.

Hamel: Um, and so I think with all of that funding, a lot of people got a lot of Build and invest in some of those products are still around. Some of them aren't, but the ones that are still around, I think they're also learning ourselves included that there's huge. Benefits to bundling these services together.

Hamel: Now, now that we've built them cheaper, we can get even more synergies and pass more value back to our customers by putting products together because we'll be able to leverage sort of unified marketing costs. We'll be able to. [00:35:00] You know, reduce things like our cost of capital and all sorts of other things by offering multiple products together.

Hamel: And so that's where, you know, we went from having one product to having two products and, uh, you know, you may have seen our, our recent news as we, uh, are joining the, the upbound group. I think it's, it's just a Testament to starting to put all of these things together, um, allows you to just deliver a better service to the customers by reducing costs.

Hamel: And so, um, what I think we'll see is. Continued value being passed back to the customer. But, uh, it's really going to be in figuring out, okay, now all of these disparate technologies and products that we've built, how do we put them together in a way that makes them even more efficient? Um, so I think it's just going to be continued reduction of friction, continued, um, uh, decreasing of costs for customers.

Hamel: And that's really, you know, I w I want people's finances to be something that they don't have to think about. And I think that that's really what we're trending towards. We're probably halfway on that journey, but now putting all the stuff together will allow us to. Put it on [00:36:00] autopilot a bit more

Mehmet: Hamel, I can see your passion and I can see you are on a mission to to help people having you know, a Healthy, you know financial life I would say which is amazing Um as we're almost coming to an end now Especially in in the area where I live.

Mehmet: I mean in the middle east and north africa region Fintech is on the boom and you know people a lot of people I speak with You What are you going to build? They tell me we want to build a startup in the fintech, right? so As an entrepreneur yourself i'm like and you've been doing this for quite some time now if you want to advise To be ctos in a startup.

Mehmet: I'm focusing on the on the tech folks here a little bit. Um So what kind of advice you give them if they are thinking to start in this domain?

Hamel: Yeah, I think, uh, it, it [00:37:00] varies so much by country. I think here in the U S it's really about the first piece of advice that I would give someone is learn as much as you can about the regulations, not just in the area that you live in, but also maybe the two areas because you're going to, you're going to spend some time sort of hovering between all these and I think the truth is for better or for worse, a lot of great products come out of regulatory arbitrage, out of figuring out, you know, what you can do that maybe isn't as well defined as something that a big bank is willing to take on.

Hamel: And that's an opportunity for you to build a product that is maybe new and innovative because it's sort of fitting in the cracks in between different regulatory areas. And I think that may be less of the case in other places in the world, but I think here in the U. S. it's definitely like. You will get the biggest, the best bang for your buck early on.

Hamel: I mean, I was the CTO, but I, you know, read cover to cover like all of the, the corresponding regulations, because whatever I built was going to be constrained by that. And I really needed [00:38:00] to understand

Mehmet: that.

Hamel: So here in the U S I would say that's definitely important. It's probably also true. And in most other places of the world, because fundamentally financial services just has to be regulated to protect consumers.

Hamel: And so knowing that really well is, is super important. And then I think the other thing, once you get running. Uh, one of the things that we have sort of learned the hard way over the years is Don't underestimate the value of redundancy. Um, you know, people expect their financial services to be failure proof.

Hamel: You know, if you swipe a card at a store, you know, if you have the money that that transaction should go through, it should have a 100 percent success rate in your mind,

Mehmet: if you

Hamel: click a button to get cash sent to your bank account, it should show up in your bank account 100 percent of the time. And. What they don't realize is that the systems that sit under them aren't always perfect.

Hamel: Uh, and so the only way that we ensure sort of perfection for our customers is making sure that we have fallbacks when things fail and that we have the redundancy in place. And so, um, it took us a long time to [00:39:00] realize that, you know, you have to have redundancy on your payment stack. You have to have redundancy on your data stack.

Hamel: You have to have redundancy kind of all across the board because things will fail. Uh, and so you want to make sure that that's, That happens in a way that is completely invisible to the customer, that you can correct it on the back end and that you can get it working. And I think if you don't do that, you're going to spend a lot of time dealing with those issues, and it's going to hold you back from being able to deliver on all the stuff.

Hamel: So the sooner that you can set up redundancy, you will 100 percent always need it. And so as soon as you're at the moment where the thing is working enough to, to, for that to be a concern in your mind, you should really invest in that sooner.

Mehmet: Great. You know, both advice are great, Hamel, because first of all, I believe, you know, and I encourage everyone, whether they are going to start a company or are they going to pursue, you know, kind of an executive role in a company, they need to understand the business side also as well.

Mehmet: And I'm happy that [00:40:00] I'm talking to more like, because, you know, Maybe I don't know, like 10, 15 years back, I wasn't seeing, you know, C level people in tech, like on, on, on the business side, you know, they were like a bit struggling. So now we're seeing this, uh, really what we call it, like a business acumen for, for these executives, which is You know, I can see it with you Hamed also as well.

Mehmet: So I'm happy with this the second one is I think also very important because to your point and especially like I was attending a webinar before we started the recording of this episode and we're talking about like how people are nowadays very um Used to have you know this you click play One button and you have a delivery after 15 minutes or like you get So you so so when you build like systems from a tech point of view Like yeah, you can say i'm gonna make it fast.

Mehmet: I'm gonna like make it but yeah redundancy I think it's it's very important because you don't want people also to [00:41:00] you know, try your app or website, whatever it is, and then find it like it's down or like, for example, they don't, uh, they are not able to access their data and it's a big issue. So I'm happy that you brought that also, Hamel, like, uh, to, to this today.

Mehmet: Finally, where people can, and this is especially for the people in the U S you might need to, to know where they can get in touch and also know more about Brigit.

Hamel: Yeah. You can learn more about Brigit at our website, Brigit. com. Uh, you can reach out to me. I'm Hamel at Brigit. com or connect with me on LinkedIn.

Mehmet: Great. Really, I enjoyed the conversation. Uh, Great insights, you know, and the story is also very Inspiring I would say and again for for the audience. You don't need to go search a lot I make your life easy You find the links in the show notes if you're listening on your favorite podcasting app if you're watching of course on youtube You will find that in the description.

Mehmet: So hamel. Thank you again for being here with me today And this is for the audience if you just discovered our podcast. [00:42:00] Thank you for passing by. I hope you enjoyed if you did so You Please give us a thumb up share it with your friends and colleagues And if you are one of the people who keeps coming, thank you for you know, always sending me your comments feedback I appreciate every single word you write to me and I read every single message you send So thank you for doing so and as I say always thank you for tuning in.

Mehmet: We'll be again very soon. Thank you. Bye