How Sikoia Removes the Hassle from FinTech Customer Data
By: Nina Rinke
Tags: Customer Data, Vc Thoughts, Financial Services, Fintech, Digital West

How Sikoia Removes the Hassle from FinTech Customer Data

We’re excited to have led a $2.3m pre-seed round for Sikoia, followed by our friends at Seedcamp, several unicorn founders — including Charlie Delingpole from ComplyAdvantage, Fabian Wesemann from WeFox, and Raffael Johnen from Auxmoney — along with renowned investors such as Carolina Brochado from EQT Growth. This investment news is exciting for three reasons: 1) It further builds up our London FinTech footprint, 2) addresses what has become a fragmented landscape of data sources in FinTech, and 3) introduces API marketplace dynamics into the lending ecosystem.

We’re diving into Sikoia’s story so you can visualize the financial data landscape from a new angle, and discover how this startup team fits in to help.

Financial services context 💵

Currently, we see three macro trends across the financial services market. The first is the prolific entrance of new non-financial players into the market, such as marketplaces, property portals, and even accounting software providers.

The second is that financial services companies — both traditional players and these new entrants — are becoming increasingly data-driven in order to compete and deliver best-in-class customer experiences.

Finally, there is an increasing proliferation and fragmentation of data sources and APIs to access financial data on consumers and businesses. These include government APIs such as HMRC, payroll providers in Europe, and open-banking enabled transaction data.

What’s the problem? 🛑

Poor data quality costs financial services both time and money, and can even pose a regulatory risk. With an increasing number of API providers, not only does that mean more data formats to be normalized and managed, it also means more data silos and higher maintenance costs.

For financial services companies, collecting and gathering insights from customers is hard: it’s often a semi-manual, error-prone and document-based process. New FinTechs and APIs help access different parts of this data more efficiently, but the result is a fragmentation of customer data that needs to be reconciled across different channels, verified, and re-typed in multiple systems.

How does Sikoia solve this? 🧩

Sikoia has been designed to take advantage of these trends, thereby helping any provider make the best use out of their customer data and improve decision making.

Sikoia is a meta layer on top of various API providers and data sources — aggregating and orchestrating consumer data (credit scores, KYC, etc.) and providing insights for lending decisions. What does this mean? It’s a cure for any headache around API integration and maintenance, and streamlining multiple data formats.

Sikoia provides a single, comprehensive, 360-degree dashboard to FinTech and financial institutions visualizing their customer data to improve decision-making processes plus access to a comprehensive and pre-configured API ecosystem in one integration (ranging from Credit Score bureaus, Open Banking, KYC, AML up to third-party databases, and alternative data sources).

Sikoia’s mission is to build a fair and transparent financial system via simplified decision-making processes. In the end, consumers benefit: data-driven decisions based on high-quality and comprehensive data helps to remove bias from decision-making processes and support financial inclusion. For instance, customers with thin credit files will benefit from simplified integrations of additional data sources which can prove their reliability. Additionally, any data sharing must happen at the request of the consumer, thanks to data protection regulation.

In the end, consumers benefit: data-driven decisions based on high-quality and comprehensive data helps to remove bias from decision-making processes and support financial inclusion.

A uniquely qualified team 🤾🏻‍♂️

Sikoia’s founders are ready to scale: former investor at SoftBank Vision Fund and covering financial institutions at Merrill Lynch & Moelis, Alexis Rog (CEO), knows FinTech first-hand. His co-founders, Stephen Simmons (Chief Data Officer) and Alastair Bulger (CCO) bring strong technical and commercial background plus extensive financial services and start-up experience.

They’re currently co-developing their platform with two signed customers.

👉🏽 Pro tip: they are also hiring!

The bigger picture 🖼

In general, we see two notable aspects at play: 1) The pandemic forced financial services to take a digital-first approach and change customer interaction, which has increased efficiency and minimized risk; and 2) Global and regulatory pushes increasing competition in the banking sector through Open Banking — i.e. financial institutions are forced to share transaction data more transparently (at the request of the consumer), minimizing switching costs for consumers, while nurturing competition and innovation across financial products.

Both of these factors have led to an accelerated supply of FinTechs which provide new services to consumers and APIs to access more data, but at the cost of exponential complexity in the market.

What’s next? 🔮

More non-financial players are entering the market leading to an increasing fragmentation of financial services — marketplaces, accounting players, property portals for example, are all looking to embed financial products.

The number of APIs available will keep growing. Sikoia addresses this by helping any provider make the best use out of their customer data and improve decision making. We can’t wait to see how they do it!

As our Partner Christian Nagel comments: “We strongly believe that Sikoia will solve the immense pain point of the financial industry to cope with an increasing number of data sources. Data silos, multiple data formats, and poor data quality lead to highly inefficient processes today. We are excited to join forces with the stellar founding team at Sikoia, building a unified data platform to address those issues.“

Welcome, team Sikoia, to the EBVCgang. Super glad to have you aboard!

Learn more about Sikoia at https://sikoia.com/ or follow them on Twitter. Keep up with Earlybird for the latest VC startup ecosystem news and updates.