Krishna Subramanyan, CEO, Bruc Bond

Today, we're meeting Krishna Subramanyan, the CEO of Bruc Bond, one of the most fascinating corporate cross border payment providers I've ever come across.

Over to you, Krishna - my questions are in bold.

Could you tell us about your background? How did you get to Bruc Bond Bank?

Thank you so much for having me, it’s great to be speaking with you. I started my journey in Financial Services as a compliance programs head for Asia-Pacific back in 2008 at a US-based industrial conglomerate that also had a significant global financial services business. I had the opportunity to establish systems and controls with insights from my industrial side experience running their sales, marketing, distribution, customer service delivery, order fulfilment, business acquisition & integration, quality/six-sigma, regulatory affairs and digitalisation.

When the financial global financial crisis hit the US, regulators began to identify systemically significant financial institutions. This conglomerate had a significant financial wing, and believe it or not, we were designated as a systemically significant player. That brought to the entire global organisation the need to step-up our financial services compliance controls to pass the scrutiny of the apex US regulator.

At this point, the company was the world’s largest private equity player as well, in addition to book-running, securitisation, leasing, factoring, lending, real estate, credit cards, banking, and insurance businesses. I am very grateful for that opportunity from Jan 2008 to April 2014. This rich experience became the springboard to subsequent opportunities leading compliance and AML/Sanctions programs to some of the largest global banks in the world, while at the same time, exposing me to other financial service products such as savings ACs, Private Banking, Markets, Corporate Banking, Correspondent Banking, Investment Banking, Commodities Banking and Transactional Banking. These included Macquarie Bank, Scotia Bank, and Citibank.

This first job exposed me to all these sectors: lending, leasing, securitisation, running private equity, real estate financing and a whole lot more. If I were to look back to see what area of financial services that I have not touched or supervised, it would be the Crypto business – and I have every intention to check that box as well.

Working in these large banks, there comes a point when you feel that you can do more with the knowledge you have. I met a set of investors, based out of Israel, who were interested in forming a FinTech player in Singapore – and that's how I ended up joining Bruc Bond.

Did you always intend becoming a founder?

Not necessarily a ‘founder’ but most certainly to be running a Company, particularly once you have had the chance to study business formally and step through the various real-life case studies at a reputed US business school – which I did. Unlike many bank executives, I’ve had the opportunity to see how money is actually generated by business – and I think that gives you a different appreciation of the business needs when it comes to financial products and services. So, I did harbour an ambition in my mind to create something from scratch and to build a bank.

Could you give us an overview of how you went about founding the company?

I got connected to our investors through the financial regulator here in Singapore. I was probably lucky to be in the right place at the right time when the application for licensing Bruc Bond came up. I sat with the investors – we discussed the details and then I presented this for approval by the regulator – and the rest is history.

This method gave me a great opportunity to shape the very initial steps of the bank – the vision, our client mission, our partners, our suppliers, and operating methodology. We clearly defined our mission to bring the private banking experience to corporate clients.

By corporates though, I don’t mean multi-nationals like General Electric. I’m talking about companies that are generating perhaps $10M-$20M in annual revenues and are poorly served by existing bank offerings. For example, companies of this size will typically be served by one relationship manager (“RM”) with perhaps 600-800 other clients – and the cost to deliver that RM service might be upwards of $20,000 per client annually. So, if the bank isn’t making this amount per client, this entire segment is essentially unprofitable.

The service levels for these companies are getting even worse: in many cases, you can’t speak to your RM anymore – you need to dial an ‘800’ number and now you’re being answered by an AI agent. That just doesn’t work for the complex needs of these $20M turnover businesses.

Instead of something like one RM to 800 customers, our RMs manage no more than 15 clients. They know each business like the back of their hand. We don’t want millions of customers. We want a handful that will never leave us. That’s what we’re building at Bruc Bond: the private bank for mid-sized corporates.

What's your job title and what are your responsibilities in the business?

I have a few job titles. I am the CEO, of course, and I am the Executive Director (a requirement of the Singaporean regulator) and I’m also the Chairman of the Board.

Can you give us an overview of the business?

We are in the business of providing the best possible service to corporate clients across legitimate and non-prohibited industries in moving and receiving their corporate funds in the most efficient, transparent and cost-effective manner.

We make sure we are available at all times to answer customer questions and take insights from them to improve the services that they need at the moment and in the future. That means we are willing to adapt our business and our business model to the evolving needs of the business that we serve.

Where did the company name come from, Krishna?

We worked with a branding firm to come up with a name that didn’t necessarily suggest financial services, but inspired supreme confidence. The word ‘bruc’ is actually German for ‘bridge’ and then ‘bond’ suggested our underlying intent to build long-term relationships. So that’s how we came up with the name.

How is the bank funded?

We were completely funded through shareholder funds, and we are probably among the most profitable major payment institutions in Singapore. We are completely bootstrapped, building out everything with those funds. We have no borrowings.

What is your business model?

Our business model is almost exactly the opposite of a traditional bank. Banks tend to charge a fee for almost everything you want them to do. Need a report? That’s a fee. Want an extra statement? More fees.

By contrast, we have a very simple service model, and we don’t charge a single coin outside that for our product package.  Additional fees usually start to apply only if you need extra users, or more currency capabilities.

What kind of feedback are you getting from customers about this slightly different approach to a banking business model?

It's very positive. In fact, oftentimes, our customers know that our pricing is slightly higher than competitor banks. Whilst our pricing is very close to what a standard bank will charge, it's certainly not lower. Our customers know that our services will generally be higher in cost, but they receive a higher value service in return.

How have you found other banks reacting to your offering?

We’ve actually had quite a few coming to us asking if they could adopt our banking technology and if we could run some services for them.

That must have been unexpected?

It was, but as I said earlier, we are willing to change our business model as per our client needs. So, over the past 5 years, we’ve built out a banking platform that other banks are now using too. It was initially one or two enquiries, but after 6-7 players came to us, we started another tech company.

So, you’re also a banking platform vendor too?

Yes. We created another business to offer our banking platform on a white label business to other banking institutions around the world – in locations as diverse as Canada, the UK, Switzerland and Cyprus.

How did it feel getting those enquiries about white labelling from other banks? That must have been reassuring and exciting at the same time?

It felt great. We knew we had a great product for our own services – but when you’re busy doing your own thing, you don't often realise that you’ve built something that could be used by others. That was never our original intention. It’s very helpful to our banking business too – for example, we’re often building out tools on the system that we haven’t yet used. So, this is really helping to open our eyes to what the rest of the market is doing.

It's really unusual to meet the CEO of a regulated financial institution who is also CEO of a banking technology business and can speak so fluently about technology. I think it’s pretty accurate to suggest that most senior banking executives aren’t tech experts – indeed, many simply don’t understand how their infrastructure works. How did you develop your technical awareness – and confidence to launch and supervise a banking technology offering?

This is where my, I guess, industrial experience comes in handy. In my earlier career, I was responsible for various businesses that required a strong command of every technical detail. For example, I built a system configurator for a really complex MRI / CT scanner system. We had to break down every single component to apply the right order process, pricing margins and so on. I've been very close to building and managing these kinds of complex systems – so financial technology doesn’t bother me. In fact, they’re a lot simpler than many of the systems I had to deal with in previous roles.

I recognise it’s hard for senior bankers to even think about outsourcing software development to engineers in Ukraine, Vietnam and Myanmar for example. That’s what we did in our early days building Bruc Bond. We had to manage costs carefully. We worked completely remotely, supplying the specifications, helping define the workflows needed and supervising the entire system development.

I recognise this is a somewhat radical approach, but it meant we as an organisation are completely comfortable – fluent, essentially – when it comes to our technology stack and approach. It also means that I can directly answer challenging questions from the regulator, rather than having to outsource this to a Big 4 consultancy, for example.

If you had a magic wand, what one thing would you change in Financial Services?

I think I would want the distinction between Fiat and digital currencies to go away.

What's your message for the larger players in the financial services marketplace?

I understand that the environment makes it compelling to view yourselves as risk managers. You must view yourselves as partners in the businesses of your clients.

What’s your philosophy when it comes to interacting with clients, Krishna? Given the fact your bank is ‘fluent’ in technology, how do you approach client interactions – for example, do you prioritize AI or text chat?

Very interesting question. We do not deal with clients who do not want to show up on a video call. We want to see them. So, every single interaction with our client is via video call.

Where do you get your financial services or FinTech news from Krishna? How do you stay informed?

FinTech Profile!

Haha, good man – give that man an award! Any other methods?

Yes – as well as the usual publications and services you might expect, we try to surround ourselves with interesting, stimulating and informed people. We’re regular participants in the Singapore ecosystem and especially the Singapore FinTech Association (SFA) (I'm one of the committee members). We have developed a good way of assimilating some of the best news articles and insights from around the globe – and we make sure to get this to our entire team, whether it’s a quick update of a few bullet points or more detailed perspectives.

Can you list 3 people you rate from the FinTech and/or Financial Services sector that we should be following on LinkedIn, and why?

I’ll give you four.

• Chris Skinner for innovation in finance
• Stephanie Leung for anything wealth management
• Marcel van Oost for all things fintech
• and last but not least, Alex Jimenez for anything banking.

What FinTech services do you personally use?

eToro has a terrific product. Tether.io too.

But what's the best new FinTech product or service you've seen recently?

I’d like to see a lot more focus on sustainability initiatives – FinTech hasn’t caught up here. So, for example, in the context of environmentally sustainable infrastructure (power and data centres). I’d like to see the opportunity for FinTechs to be able to trade sustainable carbon credits.

Finally, let's talk predictions. What trends do you think are going to define the next few years in the FinTech sector?

Since you’re asking for a prediction across the next few years, let me be very bold and rattle some cages: I actually think that banks will begin to move out of Swift and use blockchain to move financial assets.

Thank you so much, Krishna!

You can find out more about Krishna Subramanyan on LinkedIn and find more about his company Bruc Bond at https://www.brucbond.com/. You can also find out about their SaaS banking service, Oskar® at https://www.brucbond.com/service/saas.