CFO Tobias Ritzén on the evolving world of fintech

Northmill recently announced Tobias Ritzén as its new CFO, leading the company’s finances on our path to simplify people’s financial life. We sat down with Tobias to get a better look at the future of Northmill, where successful fintech companies are going and the potential of blockchain.

Can you give a brief background of yourself and your experiences in finance?
Sure! I studied business and economics in Linköping, specializing in finance. I did an internship within corporate finance, and then worked at an investment bank towards the capital market - working with IPOs, equity and bond issues. After that, I went to work with M&A at Ernst & Young. Which is where I got in touch with Northmill, as I worked on a fund raising project for the company.

Other than that, I’ve been into sports since growing up - I especially enjoy soccer, and I was part of the national frisbee team when I was young. I’ve also spent some time living abroad, in Berlin and Nice, before returning to Sweden - first to my hometown of Gothenburg, and later Stockholm.

What made you want to take the role of CFO at Northmill?
I think the company is in a very exciting stage right now. It’s still a structurally small company, but is growing into a large organisation where I think there’s a lot to do in all departments. So it’s a ton of fun to be part of the team and help take the company to the next level. I think my experience, working with corporate strategies and business development for a variety companies in different sectors will contribute with an interesting angle when continuing building our business.

We are entering a new segment with our financial hub Rebilla – what advantage do we have to current offers?
I think our focus on building products and services that feel simple to use is our advantage, because we always need to put the experience for the customer first. If you contrast us to more traditional players, they are not as positioned to change because of their size; rapid technological advances mean organisational changes that takes a long time. Even as we’re growing, we have a more agile team, that can adapt and implement new ideas – whether that be insurances, payments or something different – much faster.

What would you see as our biggest challenge in the coming years?
I think with products like Rebilla, we will continue to see tremendous growth, as we expand our audience and go into new markets - just like we see growth in our current regions. So our greatest challenge is keeping up with growth by attracting great people. I think the long-term vision for everyone should be that we should make awesome products, that are considered of the highest quality in their category. To do that, we will have to invest more in everything from our underlying IT platform to UX and consumer research, as we are focused on consumers and always need to stay on the bleeding edge in that area. Right now, it might not feel that hard, but the competition will only get fiercer going forward.

There are many different types of fintech companies on the market right now. Which do you think we will still see in five years as successful ventures?
Well, for me there are two approaches to fintech: either you simplify the infrastructure of banking, or you enhance the user experience. And there’s a lot of companies focusing on the latter, without caring about profit or building a sustainable business model. They focus on winning customers by marketing aggressively and bringing value, but don’t really know how to monetize. Instead, they build the product, take in funding, develop it and get more funding until they get acquired by a bigger player. Or they wait for a profitability goal that’s a long way ahead. I think that’s a big risk in a company with too much VC funding; growth by any means becomes the goal instead. Which does not seem healthy to me; I’d rather be in a company that builds cool products while it has a working business model, so our customers don’t have to worry about whether we will be here next year.

We talked about PSD2 with our CTO last year and now it is just around the corner - what do you think that will mean for actors like us?
Well, the bigger banks will be challenged, for sure. I think they will in some ways become more of a backend-system provider for people’s banking needs. They might still be able to charge significantly for it, but their relevance will diminish. It will also create an environment where actors who can change and adapt quickly are favored. For us, that will also mean more competition, but considering that we have many loyal customers, I’d say it’s more beneficial than it is detrimental.

Do you think that we will see more de-regulation in the financial market to increase transparency?
Not primarily less regulations but definitely more transparency. Part of why the banks are strong today is because of regulation and capital, and they have a strong network that’s a bit old-fashioned. I think PSD2 will create a new infrastructure where you don’t necessarily need to be a bank to succeed. There will be a place for the big banks too, because they still have certain advantages, but more types of actors will find their place in the value chain. Basically, everything that’s centered around the customer experience will be challenged.

Closing out, what do you think about the potential of blockchain in the near future?
I think that blockchain is an interesting segment, but I’m not sure which coin is going to come out on top. I know there are more than 1000 registered coins today, and I believe 1 or 5 will survive. I think there’s opportunity in a financial infrastructure for a coin, as long as you connect it to a specific purpose. Especially as we move to a more open banking industry, I think there will be a coin between banks and the financial system that securely moves the value transfer. That coin will have a value, because it’s a component of infrastructure. The blockchain technology can also successfully be used in other areas such as tax collection, in order to develop real-time taxation instead of calculating it once per year. But again, I don’t want to bet on what coin that is going come out on top.