Given the nature of fintech, launching a start-up in this industry is never an easy task. From operating in unchartered territory to working late nights and building the right team, it’s a highly demanding (yet ultimately rewarding) undertaking.
I’m a former BNP Paribas quant in Hong Kong. This year (having already launched the social-good tech company HelperChoice) my co-founder, ex-banker Florian Garivier, and I set up SmartAlpha, a data and portfolio management platform focused on quantitative investment products for institutional investors.
Like other start-ups, we aim to use technology to find solutions to emerging problems – in our case the lack of easily accessible data on the burgeoning quant investments market.
But in fintech, of course, there is no blueprint for success.
Among our biggest early challenges was finding the right team. First and foremost, we needed good IT developers. Given our client base (institutional investors who manage billions of dollars’ worth of assets), the integrity our data and the quality of our analytical tools are our biggest priorities.
We needed front and back-end developers who preferably had experience in both large corporates and small start-ups. People with this mix of experience aren’t always easy to find in any single market, so we decided not to confine our search to Hong Kong alone. While there were strong candidates in the local market, the applicants with the most relevant experience happened to be overseas. Fortunately, Hong Kong is attractive to IT professionals, which meant candidates were happy to relocate here.
There’s always an element of risk when hiring someone you’ve never met in person, plus you have to wait a little longer than usual before your new employee can start their job because relocating takes time.
Nonetheless, our early decision to be open to international hires, and ultimately to source talent from abroad, has paid off. And thankfully, Hong Kong’s Immigration Department is understanding when it comes to the need for specialist technology skills, so working visas were never an issue.
With our team of developers in place, we added marketing and quantitative finance specialists and then began assembling an international team of advisers with extensive networks in the investment banking industry.
Pitching the business to potential advisers was relatively easy. They were already in the quantitative finance profession and so they understood what we were about from the get-go.
What I’ve learnt from hiring for a fintech start-up is that you need to be flexible in your approach to constructing your team. As well as deciding on jobs that require specialised skills immediately, you need to think slightly out the box and define roles that have the potential to shift the company into the next gear in the future.
Working for a fintech company isn’t for everyone – some people prefer familiarity over the unknown, while others see fintech as too risky. Others, though, relish the chance to build companies from the ground up and have a more meaningful impact than they might be able to make in larger, more established firms.
To draw in candidates from banks or corporates, you need to be extremely confident in the product you’re offering and the longevity of the business model. Not many people with experience and with prospects to climb the corporate ladder want to risk joining a fintech start-up that could fail in six months.
On the other hand, you need to find people who are on the same page as you. Job descriptions are in some cases less rigid than in big banks, while there’s a greater need for creative thinking and sharing ideas that can help the business improve.
Make no mistake, there’s a lot of merit to working for corporates, particularly in the finance industry and especially for graduates. I would certainly not have been able to launch SmartAlpha without my years of experience on the trading floor at BNP.
But for me right now, the fintech sector is an exciting place to be in – particularly when your efforts start to pay off.
I’ve found that former colleagues and acquaintances have been very willing to lend a helping hand when asked, as were others who had launched successful start-ups themselves. For bankers moving into fintech, that’s a handy resource to have.
Hong Kong-based Laurence Fauchon, a former quant at BNP Paribas, is co-founder and COO of SmartAlpha, a data and portfolio management platform dedicated to quantitative investment strategies.
Image credit: Cecilie_Arcurs, Getty