GlobalFintechSeries Interview with Vijay Ramnathan, President at MineralTree
Fintechs will be more successful by collaborating with the big incumbents in the financial services ecosystem vs competing with them says Vijay Ramnathan, President of MineralTree, Inc. in this interview. Catch the complete QnA where he talks about what’s missing in finance tech while sharing his thoughts on how MineralTree is evolving to help its customers during this world crisis caused by Covid-19.
Thanks for joining us Vijay, can you tell us a little about yourself, you’ve recently (since October!) assumed your role as president at MineralTree, what are some of the biggest highlights you are looking forward to?
Having spent most of my professional life working in banks and fintech companies, I feel like I have grown up in fintech. During that time, my experience has been that while we do important things in financial services, it tends to move slowly and evolve gradually.
When I learned about MineralTree, I saw a few things that really appealed to me. For one, MineralTree is targeting a huge market opportunity with an urgent need. There are so many factors driving middle-market businesses to automate and digitize their financial processes. We have all seen digitization of finance in our personal lives, but to date, that has not translated into our professional lives at the same level. So, the idea of digitizing finance and making it ubiquitous was very attractive to me. There is a certain urgency there that I have not seen in other segments.
Two, the product market fit is tight. Most middle-market businesses’ financial processes are still dependent on paper: invoices, paper checks, manual approvals, signatures, envelopes, etc. By digitizing and automating these processes, MineralTree is solving that issue directly and making them dramatically easier and more efficient.
Lastly, my passion is around problem-solving—through both product innovation, and equally important, business-model innovation. In my experience, it’s the combination that enables real change and broad-scale adoption. MineralTree brings both types of innovation to life and that means we can make a much bigger impact.
You’ve been part of the evolving banking and fintech segment for a while, how have you seen the segment transform over the years? Specific to payments solutions and account payables – what are the latest innovations in the newer apps/platforms that users should (and can) most look forward to?
I see a few things:
B2B is starting to resemble B2C. The consumerization of B2B financial services is happening. Professionals working in businesses expect the same modern, digital experiences at work that they have in their personal lives. Why would they not? And we’re starting to see that translate all around us.
Related to that, the notion of digitizing and automating payments has been around for a long time. But to date, it has been largely limited to replacing checks. We’ve taken an inefficient paper process and made it an inefficient digital process. That doesn’t really do much for anyone. We have to look at the problem more holistically. How do we address the underlying friction? Users and technology solution providers are starting to see the bigger picture – and realizing the benefit of digitizing and automating entire processes like accounts payable from end-to-end.
Another is less of an innovation and more of the realization that fintechs will be more successful by collaborating with the big incumbents in the financial services ecosystem vs. competing with them. We’ve heard so much about fintechs disrupting the incumbents over the years. It sounds great, but the reality is we need each other. Incumbents like banks, card schemes and payment processors offer scale and fintechs offer innovation. They just need to adjust their attitudes, or to paraphrase another executive: “reconcile their cultural differences on things like appetite for risk.” The reality is that very little money moves in this world without the involvement of the big incumbents. MineralTree has taken the approach to collaborate with incumbents from the start. Together, we have a much better shot at changing the way Accounts Payable works.
Related to all of the above, there is much more focus on improving the finance function overall. It starts with the user experience but it has to account for the complete business system experience. We’re surrounded by legacy systems: ERP, trading partners, etc. The advances in cloud computing, AI and machine learning, and APIs – all help overcome that complexity and drive a level of automation that enables us to better meet the underlying need, at scale.
Given the current global challenges because of the Covid-19 crisis- what are some of the ways MineralTree is innovating its features/platforms or offerings to help the customer base more during this time?
We are responding in several ways.
At the business level, cash is so important right now. By digitizing processes like AP, companies benefit from more visibility and more control over their cash flow. In addition, to help our customers turn AP into a cash generator, we are matching all MineralTree SilverPay (our virtual card program) rebates for the next three months. This represents a significant opportunity for all of our customers to generate extra cash at a time when they need it most.
At the technology level, there are a few things. We recently announced the expansion of our integration capabilities to help more middle-market businesses automate their AP processes. The new capability adds hundreds of accounting and Enterprise Resource Planning (ERP) software options that can integrate with MineralTree’s AP Automation solution. This opens up modern AP automation capabilities to a much larger segment of middle-market businesses while also supporting new remote work requirements for finance teams. We are also using AI and machine learning for least-cost routing. This is helping our clients further reduce the cost of their internal operations at a time when every dollar counts.
The crisis has also had the effect of accelerating our implementation timelines significantly. Customers suddenly facing the need to work remotely needed to get their AP process automated as quickly as possible. We’re getting customers up and running in as little as 5 days. In addition to MineralTree applying resources to get customers up and running, the crisis in many ways has removed a lot of the barriers that existed within the customers’ own organizations.
Building, scaling and constantly training a good team in new segments like Fintech is crucial to achieving business goals, could you share some of your top takeaways when it comes to hiring and building a strong team for the ever evolving fintech segment today – what should younger fintech companies be looking at more?
For us, talent is number one. It’s all about the quality of people. We look for bright, intellectually curious people that are not afraid to break things and push the edge. But we also expect them to learn quickly from their mistakes.
We look at both industry domain and SaaS expertise. Our team is a really good reflection of that combination. For example, half of our leadership team comes out of the banking, fintech and payments side. The other half of the team is very deep in SaaS which is core to our business model and value prop. You’ll see the same blend across the business. This also has the additional benefit of offering diversity of thought and perspectives.
We also put a big focus on execution. An idea is only as good as what gets put into action.
At a time such as the present due to the current Coronavirus pandemic where global tech companies and teams are working remote – what are your top takeaways for remote work on the whole, for maintaining high employee motivation and for the fintech and payments segment? What are the top factors you’d share for teams to keep in mind?
No one really has a playbook for this but we’re trying to do a few things to keep the team connected and motivated.
Making sure people have the right tools to work remotely and collaborate easily is important of course. A lot of this was already in place at MineralTree but we’ve supplemented in some areas like online security.
One thing we emphasize to those employees that are not used to working remotely is to get into a good routine. Every week we have a company call where we feature a different employee talking about how they are managing during the crisis. What does their daily routine look like? How are they navigating different challenges? What is working for them and what isn’t? It leads to some really good idea sharing and keeps people connected.
We also emphasize time management and work-life balance. This is really important because people don’t have the natural environmental changes to tell them instinctively when the workday starts and ends. The lines blur both ways.
As leaders, we also need to make ourselves more accessible. Management by “walking around” isn’t possible of course. So, we are trying to create both structured and unstructured opportunities to make ourselves accessible to the team. Some of that comes in our weekly company calls, but we’re also making it a point to create smaller online forums with different teams and to reach out to people proactively to check in.
How according to you will the fintech segment shape up in the next couple of years, given the constant innovations and investments in certain areas? What do you think this landscape will look like in future? And how will the impact of the coronavirus pandemic change how the segment evolves globally?
I’d emphasize two things.
Short term, the crisis has really reminded people how paper-based their finance function is – even in 2020. The inefficiencies in cost and cycle time, the lack of control over cash flow, the potential for fraud, and the challenges of managing the finance function remotely, are hard to ignore. It’s really accelerating companies’ digitization efforts, especially in small and medium businesses.
The other is the need to remove the obstacles for companies. If we make it too complex, too costly or too disruptive to their business to get started, we’re putting it out of reach – especially for small and medium businesses. That means more emphasis on ease of use, seamless integrations, and faster/lighter touch deployments.
Longer term, I think you’ll see both of those trends continue. We also expect cash management to be prioritized more as a result of the crisis. It’s part of broader trend of companies trying to manage their business risk and be more resilient.
Tag (mention/write about) the one person in the fintech industry whose answers to these questions you would love to read!
There are a lot of fintech leaders I admire. One example I will call out is the team at Credit Karma—Kenneth Lin, Ryan Graciano, and Nichole Mustard. Credit used to be this scary, out-of-reach concept that no one fully understood, yet it impacted everyone. They’ve completely demystified it. I think it’s a great combination of an idea, technology and business model adding immense value in a massive addressable market. In the process they have added incredible value for the business and its shareholders as well. Credit Karma was bought by Intuit for $7.1B.
Your favorite FinanceTech quote
I’ll comment on a philosophy instead. It has to do with innovation. I heard this during a seminar over 15 years ago, and am not sure of the source but in many cases, I believe we tend to put too much focus on the idea behind innovation vs. the action of innovation. I look at it as “PEOPLE putting IDEAS into VALUABLE ACTION.”
In my view, innovation is much more than the idea. When harnessed and refined and tested and poked at by smart, curious PEOPLE, the idea gets better. You can’t really have innovation without EXECUTION. Finally, if it is not adding VALUE, it is of very little use. Real innovation adds value for the customer and for the business. It requires both the idea/technology as well as the right business model.