“Data is ingrained in my DNA,” says Michel Kilzi, Founder & Co-CEO of Cashcall. A globally savvy entrepreneur with over 20 years of experience in Fintech, specifically data intelligence, his goal is to redefine the role of data as an asset in an ever-changing world.
Michel is also the founder of Fineon Exchange, a leading European trade finance platform that provides a go-to export receivable finance marketplace for European exporters looking to optimize working capital and create a new paradigm in Export Trade Finance, while entering emerging and developing markets.
He has a passion for developing innovative products and business models, and is also a member of the Forbes Business Councils, a professional organization for top CEOs and entrepreneurs.
A passion for data and Fintech
Michel loves finance and saw data as the catalyst to unlock many of the restrictions and limitations that existed prior to the new digital world of today. He has a passion of creativity and innovation, a deep understanding of data and how it can play a major role in the financial services.
“I lived during an age where we were able to innovate a lot and this has amplified my passion around Fintech.”
Back during the early 2000s, Michel started working in what used to be called alternative finance. He started innovating in consumer finance and microfinance and accumulated a lot of valuable experience and knowledge. Over time, he was involved in many advisory missions for banks and non-banking financial institutions, on top of his entrepreneurial initiatives and startups.
“I went through some failures and then after few successes, I think this is the basic track for any entrepreneure; and I learned to keep my head up during failures, and keep my head down during success. I lived the evolution of banks shifting to computers and automation. Then came digital banking, mobile banking. I lived and witnessed all of this, and being creative and a risk taker by nature, I embarked on many experiments that were very rewarding in terms of learning” he says.
Even at a time when customers filled in an application for a mortgage or a loan application on paper, Michel believed that data would make an impact. “At the end of the day, we were all dying for data, for pay slips, for electricity utility bills, to identify profiles and risks. It was a challenge when this was still information capture on a paper,” he recollects.
Then Michel started talking at conferences and while he liked it, he found it frustrating that he couldn’t share everything he wanted to share. So he started writing to share his thoughts. “In the beginning, it was not easy. My first article took me two to three months. Now, once I’m inspired about the subject, I write easily. I like writing,” he states.
Data is a driver for financial inclusivity
Michel observes that data is everywhere. Everything is turning into a digital channel, and every one of us is leaving behind more digital footprints and data. The greater the adoption of these technologies, the more digital footprints, and more correlation of data touch points into a financial footprint.
COVID accelerated the adoption of mobile phones, apps, point of sales, and all kind of digital channels in emerging markets. Any interaction populates or creates more data, and more data touch points contribute to this new world of data-driven financial services.
“Today, we’re witnessing lots of alternative data or non-conventional data that are unlocking many previous problems, especially those invisible to the mainstream financial market, like the unbanked and the underserved,” Michel notes.
It’s a way to bring the unbanked and the underserved into becoming an emerging customer, build a new customer base by exploring data to unlock their profiles, and trying to predict and guess their income level, as they have no banking relationship or history whatsoever.
Michel explains that data contributes to enhancing KYC, on-boarding, customer profiling. It can unlock income level imputation models, and through these new digital channels accessibility becomes easier. All of this enhances a data-first risk modeling, reducing fraud and credit defaults.
He goes on to explain that alternative credit scoring is where alternative data feeds into the score, to predict a customer’s ability to pay a loan. Data is also about behavioral analytics, going into their lifestyle in the understanding of how they spend and how they behave.
These clusters are segments of society, each of which has different needs. So there’s no one-size-fits-all solution that applies across the board. As there are no more boundaries to accessing financial services, data is contributing to new ways to make non-banking financial services available to an emerging customer base.
“We’re moving from non-financial data to correlate a certain financial meaning, financial attribute, or patterns that help to unlock financial access to services. So data is a driver for financial inclusivity. It’s a driver to avail fit-for-purpose solutions,” he states.
How data is becoming a personal asset
Michel was an early visionary, predicting back in 2018 that data was becoming a personal asset. He points out the exploitation and monetization of our individual data and the imbalance of value distribution; the problems around market abuse of individual data privacy; and how big-techcompanies are still abusing our data.
He remarks that big-tech are the only party benefiting from the economic value our data is bringing to the market. So back in 2018, the European Union, through the GDPR Data Privacy Act, confirmed that the data populated by any individual, in terms of intellectual property, is the ownership of this specific individual.
“There’s a legal regulatory framework that confirms that you’re the owner of whatever data you populate, being European in Europe, which means that you have the right to claim back this data,” Michel explains.
This means, whatever online platforms you use, and transactions you make on those platforms, that data is yours, under the ownership of intellectual property. So eventually you can claim this data back.
While this doesn’t mean the platforms are not exploiting your data, but regulations are evolving to ensure that it’s being exploited with your consent, and within a certain framework.
“By the fact that you can claim back your data, it becomes yours, and becomes an asset; and like any asset, it should have an economic value. It’s like owning an apartment or owning a car,” Michel observes.
On the other side of the equation brands are dying for actionable insights, for knowledge of customer preferences. All of this is based on predictive models or predictive algorithms that try to unlock a certain attribute for a certain person.
“ Based on certain likes on Facebook or posts or tweets, the accuracy rate of predictive models saying that you like dark chocolate for example is quite low. We cannot rely on such contaminated data,” states Michel.
He explains that we’re the only ones positioned to reveal a 360-degree profile of ourselves, and this begins by aggregating different data touch points that we leave on different platforms.
“Facebook has a very narrow view on you. Amazon has a different narrow view on you. Your mobile operator has another view on you. But by aggregating all of those into your own profile, it becomes interesting because we can start seeing your 360-degree profile, if you wish to reveal it” Michel elaborates.
He notes that once you’ve aggregated your data, you’re going to make sure that it’s genuine to you. So for example, you might have bought a romance book on Amazon, but you’re not buying it for yourself.
“So I cannot say that you love romance books, because you were not buying it for you. I cannot rely on prediction algorithms to say that you like dark chocolate. But if you’re confirming that you like dark chocolate, it is genuine, validated, and verified data,” explains Michel.
This refinement and enrichment of data is transforming data into insights, and this is what’s valuable, and what makes your data an asset that starts appreciating in terms of value. First, you aggregate; second, you verify, refine, enrich. All of this data turns into valuable insights, actionable insights, and your data gains more and more value.
“So for example, you have an apartment and you always maintain the apartment, you decorate it, you equip the kitchen. And then once you’re going to rent it or sell it, it has even more value. It’s the same with data,” says Michel.
He points out that we’re living in very interesting times where data is shifting to become individual asset and user controlled. The individual is taking ownership of their data, and they’re in control and can decide if they want to monetize it and benefit from it economically, or conceal it.
Whether they want to put it at the advantage of research centers, share it with their preferred brands to have a curated experience, or be an audience for private sales for loyalty programs, the individual is in control of what they want to do with their data. “It’s becoming an intangible asset in every field, every industry,” notes Michel.
Innovating in the ocean of Fintech 3.0
Michel recalls how Fintech 1.0 was positioning tech companies into the field of finance as a total disruption to the Banking and Financial industries. With Fintech 2.0, we started seeing collaboration and a race between the bank and Fintech that neither of them was winning. “The winner is simply the customer. So it’s the customer who takes advantage of this evolution,” he says, noting that this race is all about providing fit-for-purpose solutions that are frictionless, easy, accessible, and cost-effective to the consumer, and the consumer is the one who wins this race.
While Fintech 2.0 is still ongoing and seeing improvements, it’s in a transitory phase, moving out of Fintech 2.0 and into 3.0, where the UI/UX, the user experience, and user interface are the priority. “In Fintech 3.0, it’s definitely customer-first, data-first, utility and convenience first, through frictionless experiences,” Michel observes.
He notes that what we’re seeing today is that the back-end is coming a major priority, which means more convenient and utility functionalities that are contextual. “It’s all about availing services in a more contextual environment or experience,” Michel explains.
This is embedded finance, he notes, and for this, we need lots of orchestration layers, and connectivity – the super-conduits. This started with a simple BNPL (Buy Now Pay Later) option. But payment comes with credit, scoring, KYC, so you need lots of connectivity in the back end to hide its complexity.
“At the end of the day the real challenge is how to hide the complexity of payment and finance, to provide a totally frictionless experience,” Michel notes.
It’s all about hiding the complexity of those structures through super conduits and orchestration layers that will make them accessible, instant and real-time, frictionless, and dynamically be able to bundle services and products that are now being rented from the old banking suite of products.
Michel explains Fintech 3.0 is all about democratizing finance, and that we’re now witnessing the defragmentation or debundling of the old banking structure, in a way that the customer who needs specific bundles are picking and choosing different products with different services as one solution.
“Trust is pivotal within Fintech 3.0. We’re seeing KYC merging with credentials within dual identity wallets that, in my view, are shaping as a hybrid wallet for very specific and sensitive identities; at the same time, a fully controlled credential. So it’s one wallet, but built in a bridge mode between a custodian ensuring the very sensitive identities and a full control for individual credentials. All of this is unlocking, on-boarding, becoming swifter, becoming easier, and faster,” he states.
Michel also remarks that we’re seeing lots of biometric applications. For instance, MasterCard launched Smile to Pay, where you just need to smile in front of a camera and you’ve paid.
“We’re working a lot on free-flow payments, where your car enters a gas station, fills gas, you drive out of the gas station, and you’ve paid. We’re also working on digital assets based on crypto smart contracts that are transferable. So Fintech 3.0 is a major revolution, and perhaps a total revamp of Fintech 2.0,” he declares.
Creating financial inclusivity with Cashcall
Michel explains that Cashcall is a data-driven payment network. Their first line of business is a billers aggregation as a payment network for the utility companies, water, electricity, mobile operators, taxes, University tuition, school tuitions, donations, gaming, vouchers, cable TV, and many other services that are either subscription-based or need recurrent repetitive payments.
Cashcall has around 300 different services and 25,000 points-of-sale across Egypt where citizens can go through the Point of Sales and pay for those utilities, services, and taxes. They also specialize in open finance, to act as an enabler for non-bank financial services, to unlock invisible and underserved customers.
Cashcall innovates around alternative profiling, and alternative credit scoring, and takes customers through the inclusivity journey, while having financial institutions and insurance companies as partners.
“We’re able to leverage data to unlock access to financial services, and this is an edge for Cashcall. We have the acceptance on the POS, processing payments for micro small and medium enterprises; we process payments online for e-commerce, for online businesses through our payment gateway” explains Michel.
He notes that Cashcall is a fantastic data-driven Fintech positioned as an enabler of the ecosystem looking to create more financial inclusivity in a market where around 65 per cent of consumers don’t have a bank account, financial social history, or financial footprint in the credit bureau.
“It’s a green field market. We’re looking into how to leverage micro-insurance as collateral to unlock certain loans. Cashcall is mainly investing in data innovation and financial channels, and I’m newly involved as an executive CEO. It’s really inspiring. I’m able to inject lots of creativity and innovation into the operation,” Michel states.
Cashcall’s ambition is to confirm its auditioning as an enabler of added value non-banking financial services, leveraging data for market accessibility, to increase inclusivity and expand this emerging new customer base into the mainstream.
“I’m lucky that Cashcall operates in North Africa, more specifically in Egypt,” says Michel. “It’s a country that I discovered lately and I love it. I see the potential. It’s a green field for innovation. There’s lots of competition, but lots of room to innovate around financial inclusivity.”
Unlike manufacturing, where there’s a product and a supply chain, banks do everything, from creating to managing, selling, and distributing the product. Michel points out that this is not going to continue, as the banking system is going through a defragmentation, and banks will become more of a utility provider.
In that space, Cashcall has the ambition to be the front liner, serving fit-to-purpose solutions tailored for specific clusters of society that have specific needs; and those needs cannot be unlocked without data that reveals who they are and what they need.
Data will tell us how affordable a certain product or service is to customers, their ability to repay a loan, their saving capabilities, and what kind of protection they need.
“We’re moving towards new digital asset class within this democratization of financial services. The word is moving towards cryptography, smart contracts, digital assets, digital currencies, irrespective of which currency and how it’s regulated. Our main challenge is to manage clients’ expectations and needs within the boundaries of regulators. We must respect, abide, and be in compliance with the regulation,” he advises.
Entrepreneurship is a marathon that doesn’t stop
Michel observes that for him, success comes out of failures, disappointments, and learnings. He notes that being an entrepreneur is not easy, as you have to take care of many tasks and details.
“It’s all about perseverance. You need to be on top of what you’re doing and make sure that you’re on the right track. To succeed, you must stick to your objectives and be focused. As an entrepreneur, it’s very easy to start trying lots of things. Focus is not easy, but it’s the key to success,” he states.
Michel notes that it’s important for an entrepreneur to trust their intuition, and that comes from passion. You can’t succeed unless you’re passionate about what you’re trying to build.
While entrepreneurs must dream, the most important focus should be on execution and performance; doing in one day what others achieve in a week, especially in startup mode. Failure and doubt make you stronger, and provide excellent learning experiences.
“The biggest challenge is the constant self-doubt of whether you’re on the right track or not. On the positive side, it pushes you to validate and recheck and revalidate if you’re really on the right track,” he states.
Michel observes that entrepreneurship is a marathon that doesn’t end. Even when you’re sleeping, you’re thinking about problems and solutions. Achievement and performance are his motivation, and while he’s good at delegating, he cannot sleep if he doesn’t see tangible execution.
“Aggressive execution is what keeps me up day and night. Sometimes I wake up at 3 a.m., my notepad next to me. I take notes on things to follow up on. Seeing things not done irritates me, and sometimes my team is irritated when I follow up a bit too much, but as an entrepreneur, I have no other choice,” he says.
Michel admits that he finds work life balance challenging, and it all depends on his availability and agenda. He notes that it’s all about spending quality time, but that it’s scarce and time flies.
“For example, my eldest son is relocating to join University, and I didn’t realize that he’s already 18 and moving out of home. This remains a challenge that no AI or machine learning or technology can solve yet,” he states.
The future of Fintech 3.0
On the future of Fintech 3.0, Michel observes that contextual experiences in financial services are becoming embedded within non-banking financial service businesses.
Creating frictionless environments and open-banking can drive less costly financial services and expand accessibility. These significant savings can be passed on to the end user. He advises aspiring banking and Fintech leaders to look into the new emerging customer base and how to serve them.
“Data and data-rich users will prevail. We will index, grade, or score users based on how rich their data is. This is probably a bit futuristic, but a data index score is something we might experience very soon. Those new customers will likely play a wide-ranging role within this new Fintech 3.0 ecosystem,” he predicts.
Michel notes that the Fintech ecosystem is undergoing a transformation and Fintech leaders need to acknowledge that, and develop more powerful backends that can deliver more convenience and utility functionalities, along with fluide user-friendly UI/UX.
Leaders must think about how to modernize their business model to accommodate a data-first ecosystem, where data ownership remains with the customer. “New business models and new revenue streams must be designed, and we’re seeing this in Web 3.0, through the metaverse,” he observes.