Almost Every Corner of FinTech Needs One Thing: Speed

Focal FinTech: Presented by Primary and Rise, created by Barclays.

The FinTech sector—especially in New York City—has been racing to offer solutions that close inequality gaps, democratize access to tools and expertise, streamline processes, and generally fix our outdated system. Stephany Kirkpatrick, Founder and CEO of Orum, points out that they will be all for naught if we can’t solve one huge problem: money moves too slow.

It’s an American problem—Europe made real-time payments possible 13 years ago. And Stephany cites that if we had done the same here in the U.S., there would be $6 billion more in the hands of underbanked American households. “That's all become profit for payday lenders, for the sheer fact that they can pay your income in real time,” Stephany says. “Imagine how we could lift financial outcomes in America.”

Her company, Orum, is doing that. It is enterprise infrastructure for smart, real-time money movement. Orum is revolutionizing how consumers and businesses send, receive, and access money through its platform of API-based, embeddable infrastructure products. Powered by proprietary intelligence, Orum optimizes transactions for speed, cost, and risk, enabling intelligent routing  across multiple rails—including ACH, same-day ACH, RTP, crypto, wires and more—unlocking 24/7/365 money movement for our partners. It helps banks, brokerages, FinTechs, and more onboard customers faster, improve customer experience, lower ACH risk and returns, and optimize how money moves in terms of risk, speed, and cost.

So as we debut our Focal FinTech list of New York City’s most impactful and influential leaders in the space, we sat down with Stephany to talk about the experiences that brought her to this idea and her perspective on important decisions for FinTech founders.

The big question: how FinTech can create real empowerment

Stephany became a Certified Financial Planner right out of college, and says that's been a key pillar of her career and life in general. “When people are flush with money, when people are down to their last dollar, and everything in between, they want to ask you what to do with it. It's always been a very interesting topic for me, and I think the answer to how you help people who have less to have more is to empower them to have access to the tools and the advice systems that traditionally wealthier classes have had in spades.”

But that’s easier said than done. As GM at LearnVest, serving a massive national client base, and then post-acquisition at Northwestern Mutual, as a VP of Digital Products reaching 6.5 million people, she says her “aha moment” was realizing that, “people absolutely want to follow great advice, but they want you to do it for them.”

The cost of sitting down for tailored support is high—and the efficiency is low. Plus, Stephany points out, “Most of what we need to optimize for financial outcomes are things we actually should do in the background daily.”

So she sat with that problem asking herself, ‘If we built the easy button for financial life, what would it be?’” There are plenty of services like Betterment or Wealthfront that assist with background money maintenance, but only on their owned platforms. Stephany wanted to improve the entire ecosystem—all our accounts, total optimization. The question became, "Why don't people do more?" And the answer on which she landed was: “Moving money is slow and hard and painful,” she says. “When I get the itch to invest a little bit extra, it's going to take seven days to actually go into the market. It's just unfortunate that we're still operating on a  system that doesn't empower access in the moment. $2 trillion sits idle in checking, earning nothing. People don't want to move it, because they're afraid. On a Saturday, when the banks are closed, the most they could get from an ATM is a couple hundred bucks, and they can't access their money for three to five days. The way ACH works is the last big payment stack, and it's due for modernization. It's 50 years old. It's time.”

Learning to work with the big players

Change is hard, though. Stephany says she feels fortunate to have seen Northwestern Mutual’s innovation process from the inside. “When you ask, ‘Where do I put the next $50 to $500 million of investment?’ Infrastructure upgrades don't have the ROI that investors are looking for. It puts leaders in big FIs in a really tough position.”

So Orum’s thesis was to start where the problem is the biggest, addressing immediate pain points. “So we started with the $62 trillion ACH landscape, and we said, ‘Listen, today you do an ACH transaction, you wait three days for the data about whether it was a good or bad transaction from a settlement perspective, and then you wait another 60 days to see if that customer is going to come back with fraud. What if instead we built a pre-authorization like what exists for credit cards, but for ACH, for 28 billion transactions growing by 8% each year?’" Orum speeds the transactions that are not risky—”the vast majority of them,” Stephany says. “Over time, as we build out our platform of managed services our customers will integrate with one embeddable API and receive access to real-time risk management, real-time payment rails, and we’ll manage the real-time ledger. You don't have to build net-new things. We hook up to you.’"

“No engineer in the world should be sitting inside of a bank, thinking, ‘Hmm, should this payment be sent as a wire transfer?’" Stephany says. “They should be building far more intricate, more important solutions. We will build the intelligence platform based on speed, risk, cost, just like how Amazon knows that a package should be DHL versus FedEx versus UPS versus USPS or their own trucks. Those are all just different final mile delivery options. We think about the payment rails the same way. Most enterprises care about  real-time transactions. The FI doing it cares about speed or risk or cost for other reasons. We then optimize which set of rails should be used.”

The elements behind Orum’s competitive edge

Working with big traditional players, there are certain boxes that simply need to be checked—like a total commitment to information security and a fully complete SOC 2 Type 2. “That was one of the first things we did,” Stephany says.

But there are also so many norms that need to be challenged. Stephany found that doing that from a place of inquiry, rather than criticism, was key. “The industry has operated for so long thinking ACH has to work a certain way; the idea that it can stand to be improved required some education,” she says. “So many of our first conversations with banks, FinTechs, investment platforms, and lenders were about digging into what they would do differently with our help instead of picking apart what they were doing wrong. We ended up having incredible traction.”

And her involvement in those conversations was critical. “I hired my first salesperson almost two years into the business, not because I believe I'm the best salesperson, but because I believe that the founder is uniquely capable of figuring out how objections can inform the product,” Stephany says. “Don't ask yourself, ‘How do I change the pitch?’ Ask yourself, ‘What do I need to change in the product?’ If you're spending time on anything else, you're probably not focused on the things that will get you to product-market fit.” Her recommendation for other FinTech founders is to bring in a right-hand account manager to run and scale the process, but “really lean into the sales piece.”

Looking back on her early days, she’s also glad she leaned into the People function from the start—she hired a Head of People when the company had about 20 employees. Orum has a DEI program and robust employee benefits including gender-blind paid parental leave. She has a board that is 50% women and a team made up of 44% women, 46% people who identify as non-white, and 46% parents. “We believe that, if you want to build innovative and industry-defining products, you need to first build a multidimensional team that can tackle problems from many different angles. Studies have consistently shown that teams that bring diverse identities and perspectives to the table outperform their non-diverse peers across key business metrics.” Infiltrating diversity not only in the workforce but also on the board and cap table has been a priority for Stephany from the beginning.
Orum is rapidly growing, both in terms of its team of engineers, data scientists and more, and its customer base. Customers are talking in the market about the experience they're having. More people are realizing they don't have to build it themselves. We can solve that. It's a solution. It's exactly how we'd hoped the market would respond.”