Bridging crypto and business banking

How Tuum helps Januar offer crypto companies access to essential business banking services.

Image source: Jens Warnez, Head of Product in Januar (L) and Ove Kreison, Co-founder & CTO in Tuum (R).

Whether you believe crypto is going to transform the world, are a complete skeptic, or just somewhere in between, you can’t argue that it isn’t here to stay. In the past decade, crypto has moved from a niche known among a select few to an increasingly widespread digital asset class.

While the new digital economy is already taking shape, traditional banks remain hyper-cautious and to date have remained at arm’s length.

As a result, web3 cryptocurrency companies such as exchanges have had either fragile or non-existent relationships with banks. And without access to one of the most basic assets a business needs – an account to receive regular money – crypto businesses have been exposed to sudden shutdowns and without the stable foundation a bank account provides to continue to innovate and realize their full potential.

January was established to help connect the crypto industry with traditional financial services – it establishes a regulatory protected, safe intermediary for crypto companies to open accounts and allow deposits and withdrawals. To create its ground-breaking account and treasury solutions, it needed to have its own core banking and payment system, where Tuum could help.

January and its crypto challenge

January provides financial infrastructure for crypto businesses in the EU to bridge the gap between the traditional centralized financial system and new decentralized financial systems. In short, it offers a compatible gateway for crypto companies and financial institutions to exchange funds and digital assets freely.

It solves this problem by offering local Danish, German and Luxembourg IBAN business accounts with Danish kroner and euro as supported currencies and related currency swaps. Founded in January 2021 by former Chainanalysis compliance-AML experts, crypto-entrepreneurs and fintech veterans, Januar is now scaling up to meet demand across Europe after it secured a €6m seed fund in May 2022 – the largest seed round ever in Danish history.

January’s product is live in Denmark after being granted a first-of-its-kind Payment Services License (PSP) from the Danish Financial Supervisory Authority (FSA) for the purpose of serving crypto companies. The company also has a pending application for a Payment Institute license so that it can soon offer a compliant, secure local EU IBAN payment account for the continent’s crypto companies.

January’s mission was very clear, as was the size of the market opportunity – Europe’s established banks and financial institutions lack the desire and know-how to support emerging digital asset organizations, which is particularly true in the local market; The Nordic countries.

“A crypto company calls up a bank and asks for an account, and the conversation usually goes like this: ‘Hmm, you’re a crypto company. Our bank doesn’t know much about this. Sounds risky. It’s not going to happen. Sorry, ha it. And it is. But the implications of that are huge – for the entrepreneurs at the forefront of this space, they’re totally vulnerable – no account means no payment, no payment means no business. We want to change that.”

Jens Warnez, product manager in January

When Januar obtained its PSP license from the Danish FSA, followed by Banking Circle joining as its first supporting bank in early 2021, it finally had all the legal and regulatory requirements in place to make the vision a reality. But when it came to building the product and the channels to manage the customer journey, Januar hit a roadblock.

At the time, Januar was ambitious, but still very new at the start. With only a couple of developers in-house and before the first big round of funding, budgets and resources were slim, and while the founding team was rich with crypto experience, the world of banking and payments turned out to be a completely different beast.

To build the foundation it needed, Januar required a core banking platform that could support both short- and long-term goals.

Tuum’s core banking solution

Januar quickly realized that it was necessary to work with a core banking provider to efficiently process bank transactions and monitor all incoming and outgoing finances. It launched an extensive research and RFP process, spoke with suppliers large and small, and defined a criteria list of more than 100 questions that it used to evaluate bid suppliers.

“I have a rule of thumb that a company should not try to build something in-house from scratch if someone else is already doing it better. It is important for companies to understand where they fit in the value chain and thus what type of company they are. Building a core banking platform technology stack from scratch in a few months was not our core competency, the compliant gateway and handling of payments is! We knew we needed to team up with the experts who are already out there,” commented Jens Warnez.

Tuum fended off its competitors and passed the 100+ question assessment. The accounts and payment modules served as a powerful platform for Januar to achieve his goals. Additionally, to support its pan-European ambitions, Januar leverages Tuum’s link with Banking Circle, giving it the ability to make and receive payments in multiple currencies, including EUR and DKK today, with more to follow in 2024.

“Payment date management is a perfect example of how head-scratching the world of payments can be if you have little experience with traditional fiat payments – there are a dozen different dates associated with a single payment, how do you decide which one is best to display in your frontend? Ask the experts ! Tuum was invaluable in building our MVP,” added Jens Warnez.

Tuum stood out from its competitors for three main reasons.

1. Quality product, competitive prices

Tuum was able to meet Januar’s complex technical requirements and provide the ‘Goldilocks’ solution. The platform offered both better quality and functionality than the smaller suppliers, while at the same time being significantly more cost-effective than the larger players in the market. It also stood out for its existing platform integrations and partnerships with Banking Circle, for payments, and HAWK:AI, for AML Transaction Monitoring. This meant that Januar could quickly ‘turn on’ these connections.

2. Agility and speed

Tuum is the epitome of a startup when it comes to agility and was very flexible to meet changing needs, timelines and requests from January. This extended from the start of the request, to product testing and bug fixes after launch. In just five months, a working product was live that could receive and send money – for a comparable solution built in-house or with one of the larger vendors, implementation would take at least a year, if not longer!

3. Communication

While Tuum’s technology speaks for itself, it was also their fast, professional and clear communication that Januar felt really set it apart from other providers in the market. During the RFP process, Tuum surpassed the competitors in the long evaluation process by answering follow-up questions and tasks. During solution development, Tuum also responded to inquiries within minutes and hours, not days, with clear and expert answers. All communication was as seamless as possible, even integrating into January’s Slack so that Tuum could be more interactive and responsive, creating a partnership that felt like a “one team” collaboration, rather than a vendor to customer relationship lost in endless formalities email chains.

Together, Januar and Tuum have achieved:

• A truly innovative payment solution

• First-mover advantage – giving Januar the edge in the fast-paced crypto world

• Optimal conditions for scaling, both geographically and in terms of product functionality

Januar and Tuum continue to work together, and after the success of the product launch in Denmark, the company now has its eyes on further European expansion.

“Having our product live and working within less than half a year is phenomenal. Without Tuum, we simply wouldn’t have a working product today, adds Jens.

For more insight into the benefits of modern core banking technology, and how to get the procurement process right, download Tuum’s latest whitepaper.