Enfuce

Would-Be Unicorn Seeks to Undercut Banks With Secure Cloud

Enfuce.jpg

As startups and investors gather in the most innovative country in the world, a financial newcomer wants to become a unicorn by providing faster and cheaper ways of processing credit card transactions.

There’s just one catch: it needs to persuade security-conscious clients to let their financial data be handled by a cloud service managed by an American retail giant.

“Our biggest challenge is the customer mindset,” said Monika Liikamaa, the 43-year-old chairman of Enfuce Financial Services Oy, a Finnish payment services provider based just a 20-minute drive from the headquarters of Nokia.

On Tuesday, she’ll be speaking at a popular startup meetup in Helsinki called Slush, which is expected to attract a crowd of more than 20,000 entrepreneurs, investors and nerds.

Banks are generally reluctant to let industry entrants run their infrastructure, and few fintechs dare try. Enfuce, which was founded by local industry veterans, bucks the trend.

In its first full year in business, in 2017, it made 3.3 million euros ($3.7 million) in sales, generating a profit of just under 300,000 euros. One of its first major clients was Finnish gas station chain ST1, which wanted a fully fledged credit card system, including support for Apple Pay. Enfuce is now targeting global sales of 600 million euros and a valuation exceeding $1 billion by 2025.

Amazon Cloud

Its basic business idea is to run a credit card system without owning expensive computer servers, which can quickly become obsolete. Instead, transactions and card data are hosted in commercially available servers owned by Amazon Web Services and located inside the European Union. That allows the system to instantly and easily adapt to demand spikes, such as on payday, while keeping costs in check.

The data is backed up every second, so when things go wrong, the customers’ cards stop working for just that second -- meaning most would never notice an outage. The services are secure and fully compliant with regulatory requirements, Liikamaa said.

The company acknowledges it faces a tough job convincing potential customers that third-party servers can be as safe as computers owned by the banks. Still, Enfuce has found that while banks are often intrigued, their compliance departments tend to put on the brakes.

“To some extent, the fear of cyber crime may be an issue” when it comes to the acceptance of new technologies, said Nina Rudanko, co-founder of industry organization Fintech Finland.

Liikamaa insists that some form of outsourcing makes sense.

Banks are so busy turning themselves into IT companies these days that they haven’t stopped to properly think about whether that infrastructure could be provided more cost-effectively and quickly by someone else, she said.

New World

“I wish Nordic banks dared to co-operate more,” Liikamaa said. “The banks’ business shouldn’t be about running IT. Banks should worry about supporting their customers in figuring out how to save and invest, buy a home and make payments. We can take care of the infrastructure.”

Enfuce’s wishes may soon be granted.

Although traditional banks tend to be “monolithic,” as Aleksi Grym, an adviser on digitization at the Bank of Finland, put it, the biggest lender in the Nordic region welcomes competition in the banking infrastructure space.

“My hope is that some of those technology companies that try to go into the core banking space" are successful, said Paul Bari, chief information officer and head of technology at Nordea Bank Abp. “Competition is healthy.”

Source: Bloomberg

Enfuce Financial Services - A Reflection on 2018

Enfuce is a Finland based forerunner in cloud-based financial services, with focus on the future of payment solutions and a global mindset.

Enfuce is a Finland based forerunner in cloud-based financial services, with focus on the future of payment solutions and a global mindset.

OpenWay is proud to have Enfuce Financial Services as a partner!

Denise Koskinen, CEO - Enfuce Financial Services:

I believe in reflecting on achievements, to be able to set new and greater goals for Enfuce. Therefore, I will end this year by reflecting on our achievements during 2018. Our mission for the year was to prepare the company for future growth. To enable that growth, we decided on a few objectives to guide us and to push us further.

These objectives were the following:

  • Explore the idea of an Open Banking platform further, for a more comprehensive offering for the payment industry.

  • Further development of our Digital Payment Platform

  • Brand awareness – who are we and what do we do?

Further development of our Digital Payment Platform

In the beginning of 2018 as we were focusing our ambitions to go beyond the Nordic countries, we also saw the need to prepare our own digital payment platform. This work has taken most of our time and efforts this year, but it has all been worth it! Today we are proud to say that we have partnered up with OpenWay, who will enable a global growth for us with their Way4 solution. 

The two most important things in running a Digital Payment Platform are hygiene factors such as high availability and PCI DSS compliance. When we go beyond hygiene, then it’s all about supporting customers in the rapid pace of change in the financial services industry – a change that is mostly due to the digital disruption we are facing.

Today, we have both hygiene and business advantage in place to support both existing and future customers of ours. Something I feel very proud and confident in!

Read more: Enfuce Official Website