At Unifimoney, we believe the last decade of Fintech has completely revolutionized banking, but also has created a new issue: to do personal finance right, a consumer must have a financial stack that often includes 5–10 financial apps. Obviously, anyone who’s started a business knows the same is true of the last few decades of software. Software for every slice of the workflow has been built, which is incredible, but also overwhelming. According to Brad van Leeuwen, who founded Cledara, 30% of Software-as-a-Service spending is wasted on unused software — it leads to billions of dollars of wasted spend each year.
Before starting Cledara, an all-in-one SaaS purchasing and management service, van Leeuwen was one of the first employees at the open-banking platform Railsbank. In July, Unifimoney became Railsbank’s first US customer for its game-changing Credit-Card-as-a-Service offering. We gave van Leeuwen a call to pick his brain about the ways SaaS will shape the future of Fintech and how Cledara and Unifimoney are both streamlining innovative sectors through rebundling.
Unifimoney: What sparked the idea for Cledara? What problem are you hoping to solve?
Brad van Leeuwen: So, Cledara is one SaaS to rule them all, effectively. We’re an all-in-one SaaS management platform that helps companies bring visibility and control to their SaaS so that they can save time, save money, and just generally be happier in the workplace.
This all came about when Cristina, my co-founder and Cledara’s CEO, was running a middle and back office for a challenger bank or a neobank that was in emerging markets, with offices in London, Amsterdam, and Cairo. I was working there too. We grew to 140 people inside two years and literally every time we hired someone, they’d want to use their own software. So, we had no idea how much we were spending and we had no idea where our data was going or how the business operated. It was to the point that our finance guy couldn’t do his job: he couldn’t budget, he couldn’t do the bookkeeping. It was chaos. And so Cledara is the system that we wish we had to manage that.
There are dozens and dozens of companies that help SaaS companies optimize the way they sell software, right? And all that conversion optimization puts complexity on the buyer of software. In the end, they’re paying for it with their wallet or their VCs funds. If you look at the statistics, something like 30% of global SaaS spend is on forgotten, unused and duplicate software. That’s tens and tens of billions every year.
Unifimoney: That’s fascinating and so similar to what we’re working on with Unifimoney. Just like Fintech has innovated but also complicated personal finance, the flood of SaaS that often solve a real problem actually creates a new problem because of the SaaS stack that it creates. We’ve built a business to rebundle Fintech and it sounds like Cledara works to rebundle SaaS.
van Leeuwen: Actually, it’s exactly the same, right? If you think of a business software 20 years ago, it was whatever your IT guy installed on your laptop or your desktop on their first day. Now you’ve got access to tens of thousands of different software products in a few clicks. And that’s great; you can do so much cool stuff. But how do you bring it all together to make it usable for you and the company and the different constituencies that are within the company?
Unifimoney: You were one of the first employees at Railsbank, which afforded you a really fascinating vantage point into the Fintech landscape. What do you see as the main differences between the Fintech market in the United States and in Asia and Europe?
van Leeuwen: There are a few different questions there. I think Asia is a world unto its own, right? Actually, the biggest Fintech in the world is in Asia; it’s not in Europe and it’s not in the US. The whole world can learn a lot from what they’re doing out there.
But in terms of Europe, the advantage that European Fintech has is there is a much better regulatory structure to operate under. The regulators have been very much pro-competition and so they’ve created licenses that a Fintech company can use that’s commensurate to their size and their risk and their capability of complying with regulation. It’s even to the point where in some countries in the UK and Europe, you’re able to directly access the payment systems. That means banks are no longer gatekeepers — imagine if in the US, a Fintech could get direct access to the Fed. It’s impossible; you can’t do it. But in Europe you actually can, which means you take an intermediary out of the stack. It has allowed Fintechs to actually be competitive from a price perspective with the competition.
Unifimoney: And why is that the case? Do European banks lean on legislators less or is it simply a different perspective on regulation?
van Leeuwen: That’s a good question. I think it’s a strategic decision from financial regulators in this part of the world to increase competition. They know, of course, that increased competition could come with more risk for the consumer, but the offset of that is much less systemic risk. In the US, they’re very much worried about the consumer and protecting them at all costs. And that’s been used as a weapon to restrict competition, I would say.
Unifimoney: And, of course, the Big Banks haven’t actually even protected the consumers in reality, with incumbent banks like Wells Fargo scamming customers.
van Leeuwen: Right, right.
Unifmoney: With your understanding of the back-of-office tools available to Fintechs, how do you see banking changing over the next five years?
van Leeuwen: For the longest time, financial services have had a one-size-fits-no-one proposition, right? Because you need epic scale to run a bank, you need to have the fewest products that serve the most people. So, they haven’t built very many good products that actually serve individual needs. But that’s what is changing super fast. If you don’t need to have a branch network, you don’t have all this legacy tech, you don’t have this expensive licensing and regulatory structure, then actually you don’t need to have mass-market products anymore. You can have niche products that serve people or businesses really, really well by actually fulfilling their specific needs. And that’s what I’m most excited about. There’ll be a lot more financial products out there than there are even today and you might use them for just very specific things that affect you. But they can still be really successful viable businesses because the whole cost structure of the industry is being redefined.
Unifimoney: The software of finance is moving so quickly and I know that SaaS moves just as quickly. How will that change the world of banking and Fintech?
van Leeuwen: Well, I would say that today, you don’t even need to be a bank, particularly in Europe, right? You don’t need to have your 5 million pounds of capital. You don’t need to spend two years lobbying the regulator to give you a banking license. You can get an e-money license and you can spin up some banking-as-a-service infrastructure, like Railsbank, and just start building MVPs and talking to customers. It means Fintech can be more like tech for the first time. There’s almost nothing an incumbent bank can do that you can’t do without being a bank these days.
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