“Our approach is a bit different from some other neobanks. We don‘t want to expand just for the sake of expanding. We want to get deeper into our markets and help our customers with their daily financial use cases.”
Kevin Albrecht, CEO and co-founder at P.F.C., is a financial technology leader with 18 years of experience in software engineering, product management, and leadership, including 10 years in finance.
P.F.C. was founded in 2012 as Betalo, building financial products and services with technology at the core. In 2018, Betalo became P.F.C. – Personal Finance Co. The company is building a mobile-first money management app to provide a personalized experience that is tailored to each person’s individual needs.
Kevin has provided Everly.eu with an exclusive interview in which he addresses how he sees the future of his company and his insights on the current state of the Fintech environment.
Let’s talk about your work experience first. You have worked for Klarna for a while, is that correct? Where did it all begin?
I started my career as a computer programmer in Florida, where I went to university and studied computer science. I got my first job at a traditional infrastructural engineering company. They were building roads and bridges and I was developing mobile apps, backend data processing tools, and databases for them. Later I moved back to California where I am originally from and worked for an education software company in San Francisco. About 10 years ago after my Swedish wife and I got married, we decided to move to Sweden.
First, it was supposed to be an experiment but we really liked living here. I got hired originally as a software developer at Klarna but I quickly changed roles. After switching to a product management role, I worked in teams that helped Klarna to launch in the US and the UK. It was a huge and thankfully successful project, and when it was complete, I realized that we had basically built the core pieces of a bank. I got inspired to build a digital bank myself. Not long later, I left Klarna around the same time as some of my friends, and we decided to start our own bank from scratch. Looking back now, it was a bit early to build a neobank in Sweden–this was in 2015. It was hard to get investment at that time so that first try did not work out. I tried again but failed to create a digital bank for the second time.
What happened then? How did you find the courage to start once more?
Then I met my co-founders in P.F.C. and we all wanted to challenge the traditional players in the financial world. Our approach was to do the research first and then adjust our product. So we interviewed a lot of people in Sweden and created prototypes of our ideas to see which ones could resonate with the potential customer. Through this, we created the idea behind P.F.C.
In 2018, we spent 6 months building the product. We had already been running a fintech company, Betalo, for several years, so we had the team, the technology, and the regulatory licensing in place. This way we were able to launch in the same year. During 2019 we acquired a lot of customers and grew very quickly. Since the start of 2020, we have been focused on expanding our product portfolio and enhancing the core functionality.
And how did you manage to get your funding after all? Do you have investors? What do you think about crowdfunding in fintech?
We got funding from financial companies here in Sweden, angel investors, and venture capital. But it is really interesting to see all the different ways you can approach funding nowadays.
Many other founders don‘t even bother with the research too much. They just go for whatever they feel like is the best thing. Your idea of doing the research, therefore, sounds unique. What is the research process like?
I would say that there are two extremes. There is one extreme where you have this one perfect idea in your head and you know exactly what you want to build. The other extreme is when you only listen to customers and their ideas. Our key goal was to simplify finances and along the way learn from our customers where we can do a better job.
There’s the old cliche about if Henry Ford had asked people what they wanted before he built the car, they would have said that they want a faster horse. Nobody knows they want the car until the car is invented. So my point is that you don‘t want to only listen to the people but you do want to be informed about what they are looking for.
So that is really how we worked. We wanted to be informed about what we can learn from our customers while being focused on our vision of simplifying finances. For example, to implement a “bill sharing“ option we did not just copy the product from some of our competitors but tested it with customers using prototypes of our product and this way we have worked on nearly every feature in the app.
What was the transition from a developer to taking care of the whole product and being CEO like?
It wasn‘t as big of a shock as it could have been. I already cared about our product a lot back when I was a software engineer in San Francisco. When I realized that I can do that in a leadership role as much as I did in a hands-on role, I became open to other roles than as an engineer. So in that sense, the transition wasn‘t all that difficult.
You have quite a broad product portfolio – from buy now, pay later options to a teen account. How do you approach this and what stands behind those ideas?
Our goal is to solve our customers’ core problems in the simplest way. When it comes to our portfolio, we try to balance it between traditional financial services and features that the incumbent banks do not offer. In Sweden, cash is basically non-existent at this point. I haven‘t touched a bill or a coin in probably a year. So our Junior account and card for children are essential here and really help parents trying to teach their kids how to handle money.
Another thing we’ve learned is that many people don‘t use savings. Not because they don‘t want to, but because it can be surprisingly difficult to set up and learn how to use a savings account in a bank. If we can simplify this for our customers and they start saving money, that product fits in our portfolio.
And how many customers have you attracted so far? Are you planning expansion beyond Sweden?
We are around 100.000 customers and we look at the Nordics as our home market. There is nothing stopping us from expanding to the rest of the Nordics, so I see that happening fairly soon. The rest of Europe is interesting as well, but right now we are focused on the Nordic market.
Our approach is a bit different from some other neobanks. We don‘t want to expand just for the sake of expanding. We want to get deeper into our markets and help our customers with their daily financial use cases. This means having a deep understanding of our customers so that we can offer them financial products that are truly useful to them.
Many challenger banks are realizing that they managed to attract customers but they are not able to monetize their model and become profitable. How would you describe your business model that secures your profitability?
We have our subscription products, one is our premium account product and the other is the junior one. Here the customer pays us a monthly fee. And we also have the products that you use when you need as a buy now, pay later option. And eventually, we would like to approach our customers with insurance and savings products. So that is our plan for the future.
For our more dedicated users, we have two subscription products with monthly fees: Premium and Junior. Besides these, we have add-ons for our free accounts in the form of a “buy now, pay later” option. The plan for the future is to approach our customers with both insurance and savings products – always with the goal to simplify personal finance for people.