Hello everybody. Welcome to the 11th episode of the Whim Blacks podcast. We're delighted that today with us is Ali Niknam. He before starting an online bank disrupted the hosting industry in the Netherlands with TransIP, and he's also the founder of the data center group. Ali, my first question to you is how did you come up with the idea to start a bank?
Well, first of all, thank you for having me. The idea to start a bank came a while back. I had these other companies, TransIP and DCG, and I was mainly focused on TransIP. We attracted great talent, and I came to the conclusion that it was best for the company and for this talent for me to step aside so they could flourish. That gave me time to wander and think. I started writing a book called 'Ondernemers krijgen nooit rust' which loosely translates to 'Entrepreneurs never catch a break.' During that book, I looked back on my experiences with TransIP, how we started with nothing and became the biggest in the Netherlands in just five years. Then I came to the conclusion that I wanted to do something new, because sitting on a beach with a big boat seemed boring. I'm actually a focused hard worker. I like to build new products that delight people and have a material community impact. When the financial crisis started around 2010-2011, I saw people getting hurt, friends unable to get mortgages or going bankrupt, and anger directed at bankers. But I realized it's a system, and the solutions felt like patchwork. So I figured, let's start doing things differently and fix the system.
Um, and then I came to the conclusion that I wanted to do something new because sitting on a beach with a big boat seemed boring. I'm actually a focused hard worker. I like to build new products that delight people and have a material community impact. When the financial crisis started around 2010-2011, I saw people getting hurt, friends unable to get mortgages or going bankrupt, and anger directed at bankers. But I realized it's a system, and the solutions felt like patchwork. So I figured, let's start doing things differently and fix the system.
Great. And obviously the financial industry is huge. Yes. What part of the system are you now fixing?
Well, up until that point and even today, all banks are roughly the same. If you change ING's color to green and tweak the banners, you can't distinguish it from ABN AMRO. Banks offer the same products and services and employ the same type of people. There's no freedom of choice. Our profound belief is that the financial crisis was systemic because there is no diversity in the system. All suppliers are roughly the same. As we know from nature, a monoculture sooner or later runs into trouble. Resilience comes from diversity. So with Bunq, we aim to do things differently. For the first time in a long time, you have freedom of choice between traditional banks and a completely different service, product, and user experience with Bunq. You can choose to stick with the old dinosaurs or go with us, who empower you to save time and manage everything from your mobile phone. The goal is not to eliminate retail branches but to supply a completely different user experience where you are in control and it is as convenient, easy, and smooth as possible. That mindset leads to a great app. Other banks have apps too, but for them an app is just a channel. For us, making you happy is our sole purpose. We are here to ensure you have the freedom to do whatever you want, whenever you want.
And so you said, well, we eliminate the retail network of banks. You're able to manage all your banking affairs with a mobile app. What kind of differentiators are in the app because ING or ABN AMRO also have an app?
It's the goal of Bunq to supply a completely different user experience, not to eliminate retail branches. A user experience where you are in control and it is as convenient, easy, and smooth as possible. That is the mindset. If you have that mindset, the logical consequence is a great app. Other banks have apps too, but for them an app is just a channel. For us, making you happy is our sole purpose. We do that with the app today, maybe someday through some other way, but we are here to make sure you have freedom of choice. And actually, I did some user research here in the office. My colleague Daniel Bonacis, our strategy director, showed the app with functionalities like scanning invoices and opening multiple IBAN accounts easily.
Yeah. How do you get this information? How do you do your user research?
One of the cool things at Bunq is that we are really close with our users. We are a very open platform where many users are together, and we can share ideas and experiences. We spend a lot of time on that platform, looking at what our users want. The second way is because of our tech background. Bunq is founded by tech guys. I am a coder at heart. We are very observant of what people want and the struggles they face in everyday life. For instance, invoice scanning helps any entrepreneur. We saw that administrative tasks are disliked, so we came up with a solution where you tap a button on your phone, it fills in payment details, and you get a picture of the invoice—no manual labor. Those are the two ways we stay close with our users.
You compared yourself a little bit to how Tesla was founded. Tesla is a computer on wheels. Would you say Bunq is an IT company in finance or are you a bank as we look at them from a traditional perspective?
I would say that we are a company that truly cares about our users' needs. We use tech to do that in the most efficient and pleasant way possible. The location where we just happen to start is banking. What's next? Time will tell. Banking is still a huge challenge, so let's fix that first and then look further.
Indeed. And you said before that you try to be the bank of the free and also for entrepreneurs provide freedom with services like invoice scanning. Yes. If you look at your target audience and you would divide them, how does that look consumer banking versus business banking?
We try to target humans in their full glory and diversity. If you look at our demographic, we have a lot of people who call themselves 'Bunkers' being part of the bank of the free. We make human life as easy and seamless as possible. Whether you have your own business, a couple of employees, are an employee, live with someone, or love tech, it's all fine. We aspire to your desires as a human being rather than chopping you up into some kind of group.
Cool. And going back to looking at people from a human perspective. You're a company that has just started compared to old-fashioned banks. That also means a comment that Daniel my colleague made: he said he was still hesitant to transfer large sums of money through Bunq compared to well the old-fashioned look of ING where you know trustworthiness is taken care of. How are you dealing with that factor? How are you trying to get yourself on par with the trustworthiness that some of the larger banks might have? I mean, there are a lot of scandals with them, but still, if you want to transfer a large sum of money, with ING or ABN AMRO it's being taken care of and there are laws behind it to ensure your money is safe. With Bunq, obviously these laws apply as well, but how are you taking care of that mindset that Daniel still had?
Part of the answer is what you said: Bunq adheres to the precise same laws and principles as all other banks. Your money is guaranteed up to €100,000 like any other bank because we fall under the deposit guarantee scheme. And as for the perception, time will need to do its work a little bit. But let me ask you a question. Let's say you have two doors. Behind door number one there is a banker, behind door number two there is a coder. You need to entrust one with something very private and secret. Which door would you pick? The banker or the coder? If I look at myself from an entrepreneurial tech perspective, I would go for the coder because I know the magic they can do. If I look at the larger audience in the Netherlands, a majority would still pick the banker because they associate coders with blockchain or other scary things. But I'm convinced that if you ask Daniel, he would pick the coder. There's a disconnect between the people we trust and the institutions we trust, and sooner or later that disconnect will align. People will realize that if they trust coders more, why trust an institution run by these people? So this is just a matter of time.
Okay, great. Looking at your internationalization. In this podcast, the Wimlexio, we have a lot of listeners from Germany. And you started in Germany as well. We have a lot of German colleagues. There's one thing that always strikes me: how Germans are perceiving data security and their privacy much more than the Dutch. How do you deal with that as a bank?
One of the nice things of Bunq is that one of our pillars is that we don't sell your private information. Privacy has always been at the core of who we are. Going back to our ideology, we want to make sure your desires as a human being are addressed and we want to delight you. We don't think you would feel comfortable if somebody sold your personal data, so why would I found a company that does that to others? So we are very well positioned for the German market.
So, what's your growth strategy for Germany specific?
It's the same as in the Netherlands. We give you an app that makes your life easier with the security of a banking license. It empowers you to do whatever you want, whenever you want, with whomever you want, making you feel part of something instead of a slave to a big corporate institution. And the app adjusts to your way of living so you can be free.
