Do you want to build a global open banking fintech? Move to America

For a long time, the UK has been considered one of the best countries to build a global fintech. The regulators were favorable, the time zone was business friendly, the investors were curious and the talent was global. Open banking was also a catalyst for success – APIs flourished, entrepreneurs came in droves and consumers were open to fintech; companies such as Wise, Monzo and Revolut became household names.

But things have changed, especially for open banking fintechs that want to become global leaders.

We have expanded into the US early in our growth phase from Series A with the belief that the lessons learned from open banking in the UK and Europe will pave the way for success.

If you really want to build a business that takes on the payment centers, the US needs to be on your road map right now! Here’s why.

Open bank payment companies need strong go-to-market partners and TAM

Open bank payment companies need to find the right unit economy. To do this, they need the strongest go-to-market partners and access to the largest total addressable market (TAM).

America – a huge TAM – has now embraced open banking and real-time payments. This is evidenced by the major banks all supporting The Clearing House’s RTP rails (a real-time payment processing network), the imminent launch of FedNow and the recent press Jamie Dimon and JP Morgan got to talk about Pay by Bank.

If you have the right go-to-market strategy, a team with strong ambitions and the support of global partners, there’s never been a better time to run into the eye of the storm and expand into the US.

Companies with European experience can build a first-mover advantage

UK banks saw open bank payments as a compliance exercise when they started, and many still do, given that the change was driven by regulators. But the fact that merchants were not driving the change has resulted in less impact, particularly around payments to the end consumer.

On the other hand, US banks are driven by merchants who demand payment innovation and a desire to build secure and scalable digital experiences for their consumers. Real-time payments and open banking are now beginning in America. It now feels very important to be on the ground from day one of the American movement, as we were in the UK. It is an opportunity for US banks to capitalize on the development of open banking and learn from other mature markets such as the UK.

This is an incredible opportunity for UK fintechs already familiar with Europe’s competitive open banking environment to jump to the US and build a first-mover advantage.

Being a first mover in the US is also easier because US investors are more ambitious about the need to build a global product. They want to capitalize on companies that have built business models and product strengths learned in Europe with access to the US at an early stage. On the other side, Europe’s investment landscape is saturated when it comes to open banking. Many of the VCs required product metrics that simply weren’t there in Europe given how early they invested in the open banking journey.

Payment titans are made in America

There is amazing payments talent in America – PayPal, Visa and Zelle are all based in the Bay Area. In addition to that fact, you have true global banks like Bank of America, Citi and JP Morgan and US-headquartered retail giants like Amazon, Walmart, Netflix and Nike with significant payment volumes hungry for innovation.

Talent, opportunity and the Brexit backlash

Having made the exciting move to leave the UK for America to grow my fintech after eight years in London, I can tell you I have no regrets so far.

That said, there are some things I miss about Europe. The UK has the most inclusive fintech community in the world and deserves its reputation as a multi-layered ecosystem, built by an exceptional group of entrepreneurs and underpinned by incredible talent. There is excellent founder support and banks are open to partnerships if they think it will support their roadmap, and many investors who want to back large companies.

However, some UK and European VCs are still less adventurous than their US counterparts, and many still lack the right ratio of operators to ex-founders around the partner table. Furthermore, Brexit has fundamentally changed the UK’s value proposition when it comes to open banking – our TAM shrank the moment our departure from the EU was written into law.

Culture shock

Of course, not everything is 100% perfect in America – and like everything in life, you need time to adjust. I have experienced a great culture shock when it comes to communicating with Americans.

American people are very direct; there are many nuances and it is a huge country. Understanding how to communicate in New York, California or Seattle can be compared to understanding the differences between London, Paris and Berlin. The cost of living in the Bay Area and the cost of talent is exciting compared to the UK (if you can believe it!), but the intensity and ambition out here is inspiring. I hope other European fintechs will come and join me!

If you are in open banking and are looking for a business model that delivers scale, value and takes advantage of the momentum in consumers and merchants moving to digital – then the US is a challenge worth meeting right now.

Brad Goodall is the CEO of the British payment company The banquet