Today we have Dr. Gamal Moukabary to talk about bonify.
bonify – Provision of free credit scores and financial optimization.
Our questions are in bold.
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Who are you and what’s your background?
My name is Gamal Moukabary. I am an engineer by training, a company builder by passion, and believer in strong institutions. I studied electrical engineering and wrote my PhD in mechanical engineering. After having founded and lead a Public-Private-Partnership for eGovernment in Germany, I worked with McKinsey & Company, serving tech companies and governments in various countries. For 6 years, I was the CEO of Regis24, a German Credit Agency – until I had the privilege to co-found bonify in 2015. All founders have been friends for a long time.
What is your job title and what are your general responsibilities?
I am the CEO of bonify. In this role, I am setting the strategic direction for our start-up. In addition, I am responsible for HR, legal, and regulation.
Can you give us an overview of your business?
The bonify platform combines 3 elements:
1. bonify offers easy-to-read credit reports and personalized score insights for free. Users can check and correct their scores, monitor changes, and receive tips on how to optimize their scores.
2. Additionally, bonify provides the possibility to manage your bank accounts. A Personal-Financial-Management-Tool (PFM) gives an easy overview of your financial status with state-of-the-art categorization of spending and income. Personal credit score plus transactional history from their bank accounts then allow our customer to get a holistic view on their “real” creditworthiness.
3. Based on their credit profile, we also provide pre-approved and individualized recommendations to help them save money.
If a customer signs up for a product (e.g., loan) through one of our recommendations, our commercial partner (e.g., bank or insurance) pays us a service fee. We never sell customer data! bonify’s business model works, because everyone can benefit: our customers, our commercial partners, and bonify. Right now, we are operating in Germany only, but eventually we are going to expand our business to other European countries.
Tell us how you are funded.
Initially, we started off self-funded. After 6 months, we raised capital through an angel-round, with the support of local angel investors as well as a few international VCs (e.g., Ribbit Capital and Index Ventures).
Why did you start the company? To solve what problems?
Before kicking off bonify in 2015, I was the CEO of a Berlin-based Credit Agency. Back then, I realized that most people in Germany don’t really know their credit scoring and why it is relevant. For this reason, I wanted to set up a company that helps democratize credit scoring (i.e., online, easy to understand, and for free).
With bonify, we are solving 3 fundamental problems in the field of credit scoring and personal financial management:
1) We provide a free credit score and transparency on credit scoring – something that has been either costly or “painful” to get before.
2) We provide a personal financial management solution that allows more transparency and easier management of financials.
3) Last, we help our users to optimize their financials by offering products which help them saving money.
Who are your target customers? What’s your revenue model?
Credit scoring affects almost everyone of legal age in Germany. In fact, it is relevant in many transactions of our daily lives: from consumer loans and apartment leases to insurances and eCommerce shopping – to name just a few examples. Thus, our service provides a benefit to a broad audience. Our customers highly appreciate our service. An example comment we recently got: “Amazing service! Fast and free transparency on credit scoring and personal finance. Finally, I understand what credit scoring actually means.” For our customers, our services are totally free of charge. Our revenue model is based on commissions payed by our commercial partners (e.g., banks), whenever we sell products to our users.
If you had a magic wand, what one thing would you change in the banking and/or FinTech sector?
That’s a difficult question. From my perspective, there is no particular solution for the banking sector. In fact, we have seen similar challenges in other industries that were disrupted by innovation, e.g., automotive, steel. If I had a magic wand, I would create more companies based on strong principles that apply to the whole organization, incl. CEO, Executives, and Board. For example, rigorous performance reviews and target setting. Institutions that are based on a set of strong principles, don’t rely on a single person. The “reason why a company exists” (e.g., to solve specifics problem like money transfer) becomes more relevant than “what does the company do right now” (e.g., manually vs. automated production).
What is your message for the larger players in the Finance industry?
Build strong institutions based on a set of principles, and go the edge with your radicalness.
What phone are you carrying and why?
An iPhone – because it’s very user-friendly.
Where do you get your industry news from?
Typically, I follow a diverse range of news channels and blogs (e.g., WirtschaftsWoche, Handelsblatt, FinanzTip). I also love to read the Economist.
Can you list 3 people you rate from the FinTech sector that we should be following on Twitter?
Yes, you should follow:
Nadja Schloessel @Ypsilon_Zett,
André M. Bajorat @ambajorat and
Frank Schwab @FrankJSchwab
Can you suggest the name of an Angel Investor or VC that might be interested in being profiled?
I would strongly recommend 2 investors: Firstly, Ribbit Capital from Palo Alto. Their focus is on FinTech and they have invested in similar companies all over the world, e.g. Credit Karma in the US, GuiaBolso in Brasil, and Raisin in Germany. Secondly, HW Capital – one of our series angel investors. HW Capital was founded by Marcus Wolsdorf and Robert Haselsteiner – two of the earliest FinTech entrepreneurs in Germany. In 1999, they founded Interhyp, Germany’s largest real-estate financing platform. In 2011, they sold their business to ING Group.
What’s the best FinTech product or service you’ve seen recently?
Raisin (formerly known as Weltsparen in Germany). Weltsparen is one of our partner companies and one of the leading platforms for fixed deposits across Europe. Instead of zero interest from your bank, you can get up to 3% interest per year – all backed up by the 100k EUR deposit guarantee scheme of the European Union.
Finally, let’s talk predictions. What trends do you think are going to define the next few years in the FinTech sector?
In my view, there are two major trends: Firstly, we will see more cooperation between well-established banks and FinTech start-ups. Through cooperation customers can benefit from better services – through state of the art UX/UI combined with mature processes. Secondly, I expect new data-driven FinTech products. As consumer data is getting better accessible, more cost efficient, and reliable (e.g., through APIs), customers will benefit from more individualized offerings such as loans or utility contracts. The user experience will be extraordinary.
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