Following the news that fintech company Cobase recently raised €10m in funding during a Series A round, we caught up with the firm’s CEO Jorge Schafraad, who discussed multi banking and why COVID-19 could lead to the greater embracing of fintechs.
PaymentExpert: Firstly, can you tell us more about Cobase and what the firm offers?
Jorge Schafraad: Let me give you a summary in bullet style:
· Cobase is a Fintech company which offers a multibank platform to large corporates with fully managed Bank connectivity, a Payment hub, and modules for Cash management and Treasury
· Based in Amsterdam, The Netherlands
· 2015 – Founder developed blueprint and basic prototype
· 2016 – Joined Accelerator Program of ING Wholesale Bank
· 2017 – Funded by ING Ventures
· 2018 – Official market launch
· 2019 – Licensed by the Dutch Central Bank (PSP/PSD2)
· 2020 – Crédit Agricole and Nordea joined as shareholders and strategic partners
Summary of the problem we solve and the functionality of the platform:
· Companies that hold accounts with different banks face many inefficiencies. They have to use different bank portals to interact with their banks and other financial service providers, and often multiple ERP connections have to be maintained. The more different banks and accounts a company has, the more complex it gets.
· Our multibank platform is a single point of access to all bank accounts and other financial products and services from many banks and financial service providers.
· Main features of the platform are a central Payment Hub, Cash Management and Treasury modules.
· The combination of this functionality with many bank connections in one place offers tremendous financial and operational efficiency, especially for medium and large size companies.
· Users and authorisation schemes can be centrally managed for all subsidiaries or departments and only one security token is needed for each user.
The latest funding round was very successful, how do you anticipate using these funds and why do you believe it was such a success?
Jorge Schafraad: We will use the new funds to further develop our capabilities. For example, we have recently launched an In-house banking module and an FX dealing module. We are now developing an auto-hedge module and liquidity forecasting module. And we are continuously adding new banks. Connecting one bank does not cost a lot of time, but because we are connecting so many, it is also adding up what we have to spend there. The new shareholders are not just investing. They plan to use our technology as well, that means a lot. We are also exploring with more banks to do the same.
PaymentExpert: Are you able to just tell us a little more about multi banking and what it means for the industry?
Jorge Schafraad: When large companies have many banks and bank accounts, it becomes a challenge to manage that efficiently. To get a total view, delegate where you want, keep things central when needed. Basic things like sending payment instructions to banks, and receiving bank statements and uploading them into another system, must be streamlined. On top of that you also need to actively manage account balances, transactions and risk. But also more operational things, like the user administration, who can access what accounts to sign transactions or view information, can become very inefficient and high risk if there is no central solution in place.
When companies bank with multiple banks, they need to organise that to keep things efficient and under control. Cobase can help companies with that. We don’t compete with banks or payment solution providers. We’re an additional party, making it simpler for companies but also for their banks.
PaymentExpert: How integral can multi-banking be for corporates as they seek to maximise engagement?
Jorge Schafraad: Cobase is an all-in-one solution. We offer very rich bank integration and on top of that everything a company needs if it wants to use a payment hub. We offer a full cash management suite and on our roadmap we have several powerful treasury management modules. That means integral and seamless. Cobase is the one-stop solution a corporate can use to get full cash visibility and control and to optimize efficiency.
PaymentExpert: Do you believe more corporations and firms will embrace fintech as we emerge from the COVID-19 crisis?
Jorge Schafraad: Yes. Not all at the same time and not all at the same pace. But I believe corporates will more and more understand how to make good use of fintech. And their banks are also more and more embracing fintech companies to move faster. So directly or indirectly, corporations will use fintech. COVID-19 is definitely a trigger for many companies to review if they are ready for the near future, where cash and liquidity will be very important again. Are they really in control of their cashflows? Where can they optimise visibility and control, what is needed or needs to be replaced to be ready and get a good grip on that?